StudentDC Interactive

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.

Sure, you know you need malpractice, but what else?  Many businesses neglect getting these insurances until it’s too late:

• Business interruption insurance, to help pay your bills and provide temporary facilities if your business is destroyed because of a disaster, like fire
• Key person life insurance to protect your family and your business if something happens to you (some banks require this anyway)
• Employment practices insurance to cover you if an employee sues you for harassment or wrongful dismissal
• If you have an office in your home, you will need separate property/casualty/liability insurance on your business equipment and the section of your home devoted to business (in other words, it’s not covered by your homeowner’s policy)

The National Association of Insurance Commissioners (the national organization of insurers that works with state insurance commissioners) has an informative website called InsureU for Business (http://www.insureuonline.org/smallbusiness/ )  that gives you information on different types of business insurance.  Before you start your practice, spend some time in this site learning about types of insurance, what it is used for, and the varieties of coverage.

I mentioned Google Sketchup a while back.  If you are not comfortable using their software, maybe you will find these tools from OfficeFinder.com more helpful. Here is what they have on their site:

• A planning checklist to use when you are looking for office space
• An office space calculator.  This one wasn’t quite as useful as I thought it would be.  It’s more for a typical office, not a chiropractic office.  Still, it’s free so you might want to give it a try.
• A lease-vs-buy discussion
• A good article on measuring office floor area, including the difference between usable space, rentable space, and common areas.  Note their chart on conversion factors.

The term “pig in a poke” comes from the old days, when someone would buy from someone else, and not see what he or she was getting.  The item being bought was not shown to the buyer before the money was paid.  Would you buy a pig in a poke?

I wouldn’t.  I would want to see what I’m getting before I shell out my hard-earned money.  But too many young chiropractors do just that.  They buy a practice, or they sign up with a practice management company, or they become an associate before getting all the facts.  Due diligence is the process of getting all the facts.  It is a complete 360 degree analysis of a business opportunity, with disclosure of all material (important) facts.

For example, if you were doing due diligence on a practice purchase, you would want to know if there were any outstanding debts that the practice had not paid.  There are lots of other items to check in a practice purchase.  A comprehensive list is included in my e-book Buying a Practice (scroll down the page to find this booklet).

If you’re looking at a practice management company, check them out at the Better Business Bureau or Ripoff.com, or go to the office of the Attorney General in your state and see if the company has complaints against it.

In any case, doing your due diligence can mean the difference between a bad transaction and one that works out well.  Get what you’re paying for - do your due diligence.