StudentDC Interactive

Many DC’s graduate and find themselves in a position where they need a short-term position.  For example, I received an email from a new grad who wanted to find a job for 10-12 months.  Here is what I suggested:

I would not include anything about the length of your stay in the cover letter.  There are lots of reasons why your stay might be extended; on the other hand, you may decide to leave earlier.  The length of a job is uncertain anyway, so it is not dishonest to avoid the issue.

You might want to check with the state chiropractic society to see if they have a register of locum (temporary) chiropractors you could get on.  You could also phrase the cover letter to state that you would consider temporary fill-in jobs.

In your cover letter, note that you will be calling the doctor within a few weeks to see if there is any interest.  You might want to prepare letters and then stop into offices with the letter and leave it.  If the doctor is available you could spend a few minutes chatting.  Your willingness to personally request a position might impress a doctor.  Of course, you would be dressed professionally.  Do follow up, pleasantly asking if the doctor received your letter and if any positions are available.  State that you are willing to work on a fill-in basis - spring/summer is a good time to do this to cover for vacations.

I wish you success in your search!

No matter what business legal form you choose, you will probably need an employer ID number.  One new DC found that the bank required her to have it before they would open an account.

I just walked someone through the process of getting her EIN (Employer ID) or “tax id” - online through the IRS website.  It’s easy.  Here’s how to do it:

1.  Go to the IRS website and on the left you’ll see a link to Form SS-4.  Download the page and print it out.

2.  Go through the form filling out all the information.  The NAICS code for chiropractors is 621310.

3.  You won’t find a box for “Limited Liability Company.”  If you are forming an LLC, you are either a single-member LLC - taxed as a sole proprietorship or a multi-member LLC - taxed as a partnership.

4.  Completing the form before you go online helps you get through the online questions more quickly and you won’t have to stop and make a decision or look something up.

5.  The online form is at the bottom of this link page: http://www.irs.gov/businesses/small/article/0,,id=102767,00.html

6.  Carefully go through the questions, answering each one completely.

7.  At the end of the process, you will have an opportunity to cancel.  Once you hit the “submit” button, it will be a minute or so and you’ll receive your EIN.

See what I mean? If you have questions, comment here or email me directly at jean@dcpracticesuccess.com.  I’m always happy to help.

There are some changes coming for limited liability companies.  Two states (Iowa and Idaho) have already adopted these changes, and in the coming months more states may also follow suit.

The changes affect both the filing documents and the operating documents.

Formerly, you filed “Articles of Organization” for your LLC with the state.  Now, in Iowa and Idaho, you must file a “Certificate of Organization.”  The filing process is the same, it’s just the document that’s a little bit different.

After your LLC has been approved, you should prepare an Operating Agreement.  Even if you setting up as a single-member LLC, you still need to have this document.  And with the changes, it becomes very important to have an agreement for multi-member LLCs.  Among the changes is a “one person-one vote” rule which states that, unless the Operating Agreement says otherwise, each member of the LLC gets one vote.  So a member with a 10% share of the membership gets the same number of votes as a member with a 90% share of the membership.  To prevent this “minority rule,” you can specifically state in your Operating Agreement how members will vote (according to percentage, for example).

There are some other similar changes to distributions.  I’ll keep you advised if I hear of other states that are making changes.

Before you set up an LLC in either Iowa or Idaho, check on the state secretary of state’s website or talk with an attorney.

By the way, in some states (like Nebraska), you can file for an LLC online.

I’ve talked before on this blog about the issue of independent contractor vs. employee, and the problem of calling a worker an “independent contractor.”  I recently found a U.S. Tax Court case the points up an additional concern that might come your way, if you are an independent contractor.  What happens if you are hired as an independent contractor and no one pays the Social Security/Medicare taxes?

Being Hired as an Independent Contractor.  In this case, a worker was hired by a company to do some work over several years.  The company, calling him an “independent contractor,” did not take payroll taxes (Social Security and Medicare) from his checks, nor did they set aside money for the employer portion of these taxes.  Each year, the company gave him a 1099-MISC (reporting income for contractors) instead of a W-2 (reporting income for employees).  He didn’t report this income (somehow figuring the IRS wouldn’t find him), nor did he pay self-employment taxes (the full amount of Social Security and Medicare owed on his income for those years.)

The Tax Court Ruling.  The IRS said he should have been considered an employee, and the Tax Court ruled that he was an employee (you can read more about this case and the Court’s opinion to find out why).  Then the question came up, as it always does:  Who is going to pay the income taxes and self-employment tax?  The worker must pay the income taxes, of course, but he was also required to pay the self-employment taxes for those years.  The employer was not required to pay these taxes.

What Does This Case Mean for You?   You go to work in a chiropractic practice and when you receive your first check, you see there is no withholding for income taxes and no deduction for Social Security and Medicare.  No matter what your contract says, you are being paid as an independent contractor.

Congratulations!  You are now self-employed, in the eyes the IRS, at least.  You should:

1.  Start setting aside money to pay your income taxes, since nothing is being withheld.

2.  Also set aside money to pay the payroll taxes (figure 15.3 percent on your net income from your self-employment as an independent contractor).

3. Start adding up your business expenses so you can lower your income and pay less income tax and payroll tax.  More on this in the next post….

Related posts:

What is an “Associate?” Employee or Independent Contractor?

Associate/Independent Contractor Issues - A Wrap-Up

I have been having a conversation with some of the readers of my Practice Startup Success newsletter about opting out of Medicare.  During the course of the discussion I received a reply from a DC who is associated with the ACA (American Chiropractic Association).  He sent me a link to their ACA TODAY site that you need to read: The article is titled “Medicare: To Participate or Not To Participate?” 

The ACA says, “Doctors of chiropractic are not among those professions that are allowed to “opt out” of Medicare.”

So you have 3 options:

1.  You can be a participating provider and wait for Medicare to pay you, which gives you higher fees (for those services that you provide which are covered- which isn’t much)

2.  You can be a non-participating provider: collecting from the patients.  Then they have to collect from Medicare. Patients obviously prever that you participate, so they don’t have to deal with Medicare.

3.  You can choose not to provide care to Medicare patients.

Those are your only options, at this point.  If you want to talk to someone about this, talk to someone at the ACA and ask what you can do to get involved.  I’m sure they would be glad of the help.

In the meantime, remember you only have until the end of December to change your participation status.

“We Mean Business” is a new TV show, sponsored by Dell Computers, on the A&E network.  The latest show features the “makeover” of a chiropractic office called Spinal Fit in Redondo Beach, California.   The makeover team came in with guns blazing to save the office from its primary problem: lack of patients.

Their solutions:

1. A new networked computer system (provided by Dell, of course) and QuickBooks.  And new appointment software (not sure what this was(.

2.  New front door and reception room decor, with a big computer screen (provided by Dell, of course)  to show off the services the office provides.

3.  New  seminar room with a computer and digital video projector (provided by you-know-who) so the doctor could show videos for patient lectures.

Of course, the team left, and now what?  Is this stuff supposed to fix all the doctor’s problems?

1.  Sure, they showed the staff how to use QuickBooks and the appointment scheduling software.  But did they teach them how to cluster book or to re-schedule patients or do recalls, to get lapsed patients back in?  I’m betting not.

2.  The  lovely new waiting room probably will make patients feel more comfortable while waiting.  But why did they have that many patients waiting?  The number one complaint by patients in all health care practices is … waiting time.  It would have been better if the rescue team spent more time teaching the doctor how to move patients through the office more efficiently.

3.  The new seminar room will give the doctor a space for lay lectures, new patient lectures.  But does he know how to give a presentation with  lots of good emotional and factual punches, and a “call to action”?  Did he really learn how to get people to sign up?  And stay?  Probably not.

My problem with extreme makeover shows and especially shows like this for businesses is that they over-simplify the problem.  The decor, the computer system, and the lack of a space to hold lectures in the office is NOT this doctor’s problem.  I would like to go back to this office in a year and see how he’s doing.  If he’s doing well, that’s great.  But if he hasn’t solved the more essential problem of getting and keeping patients, don’t be surprised.  What do you think?

I talked this morning with a student who is just starting her last year of school.  She is going into her clinical experience, but she is also trying to decide where to practice and whether to open her own business or associate.  After we talked a while she said, “There is not a lot I can do right now, is there?”  Well, yes and no.

Here are some things you can do in your last year while you are waiting anxiously to graduate.

1.  Settle on a location.  Visit towns and cities where you are interested in practicing.  Talk to the doctors in those places, especially the ones who are doing the technique you want to do.  Drive around; walk around; talk to people in the town or city.

2. Search out used equipment to buy. Check on software vendors and get demos.  Check on prices for expenses like rent, utilities, phone.  Go to practice management seminars and decide if you want a practice management company or not.

3.  Look for practices to buy, particularly in areas where you are considering moving.  Talk to the doctor; maybe you can get a externship experience with that doctor and see how the practice works.

4.  Read books, like my Planning for Practice Success, so you know the start-up process.  Start filling in a business plan, with numbers for things you will need to buy for start-up and costs for expenses (like utilities, rent, Yellow Pages).

5.  Prepare for your discussion with a bank.  Get your personal credit in order.  Seek out co-signers.  Learn about banks in your area.  Talk to vendors about leasing equipment.

5.  Finally, be flexible.  Sure, you can work toward a goal, but don’t ignore other possible opportunities that come along.  One might be THE place, THE practice you have been looking for.

I recently received an email from a grad who was concerned about the economic situation and her ability to get a loan.  Here is how I replied:

I have been talking to a lot of new DC’s who are getting loans from banks.  There are certainly still loans available from traditional banks, but, as the SCORE person suggested, they require some collateral/cash on your part, or a co-signer.   Your excellent credit is definitely a plus.

Here are some possibilities:

Leasing.  NCMIC is one place I would suggest trying to get an equipment lease.  They may also have other funds available in addition to the leases.

Non-traditional financing.  I have been writing about other places to get loans that are more “non-traditional.”  Two I have written about are BCS Business Credit and Wirth Business Credit.  I would try Wirth first; I’ll be interested in what they say.  Their interest rates will be higher than a bank, but they may be more willing to talk to you.
SBA Loan Guarantees. The SBA works with intermediaries (non-profit organizations) who will do “micro” loans (up to $35,000) for certain types of businesses.  Women-owned businesses are one of these types, as are veterans businesses.  ACCION USA is one of these organizations.
You might also try your state business development office.  They also help women business owners.

Another possibility is to get a pre-approval by the Small Business Administration.  If they approve you, you can take that to a bank and it might help persuade the bank to give you a loan.  Check with your local SBA office.

The website Business.gov provides a way for you to search for available SBA loans, micro-loans, and state loans and grants.

Oh, yes, and search the Chiropractic Economics website for more!  This is not a complete list, but it will give you a start. I’m not saying it will be easy, but there are still options out there; you just have to be very persistent and keep trying things.  I wish you success!  Please let me know if you are able to find financing for  your startup.

Remember that old phrase, “Join the Navy, see the World” ?  Well, you can do that in chiropractic, too.  If you have graduated and have your license, but you’re not ready to open a practice, and you don’t want to commit to an associate position, you might want to consider becoming a locum tenens --  someone who goes into an office in a temporary capacity to do chiropractic work.  A locum tenens is, literally, a “place holder” (locum = place, tenens =to hold); it is usually abbreviated as simply “locum” work.

There are lots of reasons why an office would need a “temp”:  maternity leave, medical leave, around-the-world cruise, military duty, and on and on.  If you want to do locum work, check with your state chiropractic association to see if they will put you on their listing.  You might also want to check out the practice-for-sale and associate-wanted articles in Chiropractic Economics and contact doctors who are looking for associates or who need to leave a practice, or try the “Finding a Job in Chiropractic” article on StudentDC.  You might be able to fill in temporarily until a new associate is hired (or maybe you want to stay and fill the position).  Being a “temp” or locum is a great way to learn more about running a chiropractic office and keeping your skills sharp while you’re trying to figure out what to do.

It’s a win-win for everyone — the doctor gets a qualified chiropractor to run the practice, and you get some money and a chance to see the world, and maybe find a great job.

I just talked to a new grad who talked to several banks and got a startup loan with only 10% down and no co-signer.  I also have heard that SBA loan money is getting harder to come by, but I heard of someone else who got an SBA-guaranteed loan.

Can you still get a loan, despite the dificult credit situation?  It depends:

• It depends on the bank.  You have to keep looking, making changes in your request, talking to bank after bank.  If you go to 10 banks, don’t give up. Maybe the 11th will be the one that says “yes.”
• It depends on the region of the country where you are, the state where you are.  The first instance above was out west.  Banks and SBA offices in other states might not be so willing to give.  I’ve never been able to figure that one out.
• It depends on your personal financial situation.  Especially your credit rating.  Banks are requiring higher FICO scores, over 700 and even up to 750 now.  Know your credit score; if it’s low, think about how you will overcome that number.
• It depends on how much you are asking.  Cut down your request to an absolute minimum.  What do you REALLY need, as opposed to what you think you want?  The less you ask for, the better your chances of receiving it.

A note of encouragement:

Perseverance is a great element of success. If you only knock long
enough at the gate, you are sure to wake up somebody.       — Longfellow