StudentDC Interactive

A tip I received from a student:
He suggested not using your personal name for your practice name. While we all want to see our “name up in lights,” this may not be the best idea for a practice name in some circumstances.

If you grew up in the town and you were a rowdy teenager, you might not want everyone in town associating your practice with your past exploits in high school. On the other hand, if you were a model citizen, it might be great for you to tell everyone you’re back in town as a professional.

The biggest reason for not using your own name for your practice is in case you want to sell the practice. It’s much easier to sell “Perfection Chiropractic” than to sell “Cosgrove Chiropractic.”

Choosing your practice name is one of the most difficult and important decisions you’ll make when you start out. See StudentDC for more tips for choosing a practice name.

You know what I’m going to say … “It depends.”  Here is what I told a young DC recently:

I don’t agree that yellow pages ads are a waste of time.  I know a couple of chiropractors who get a respectable number of new patients from YP advertising.  I don’t think $103 a month is very much, if you’re getting in the printed phone book and on yellowpages.com for that price.   

I would think your best advertising (particularly if you’re in a small or medium-sized town) would be community involvement, health fairs, other local events, just getting out where people are, especially women and families.  This doesn’t cost much (the price of a business card and a brochure).  I’m sure you’ve already done some of this. 

This DC also asked about whether to set up a website.  Again, it depends on the area.  In a small town, don’t bother.  In a medium-sized town with several competing chiropractors, it can give you an edge and help new people find you.  In a big city, it’s definitely a good idea. 

Of course, this is all my opinion.  I’d like to hear from you.  What do you think?

For more information, see what Dr. Mark Swerdlick says about essential steps for startup marketiing.

If I had a nickel for every time I’ve been asked that question, I’d be a millionaire.  And if I knew the answer to that question, I’d be a billionaire!

I recently heard from a young DC who had associated for several years, had about $25,000 in cash and assets, and a credit rating over 700.  Sounds like a slam-dunk, yes? Well, no.  That’s why he was writing me, for some help.  Here is what I suggested:

1. Go directly to the SBA in your area and see if you can get pre-approved.  The SBA might even know of a bank that might be willing to take you.  With a pre-approval letter from the SBA, you might have a better chance of getting a bank to talk to you.
2. Get involved with networking in the community where you want to be.  Go to Chamber of Commerce meetings, other community events.  What you’re trying to do is get personal contacts with bankers in the area, showing them that you’re interested in the community and that you’re serious about opening a practice.  Ask lots of questions, talk to people about your plans, get them involved.  You never know what might happen.
3. Cut down on the amount you are requesting.  Keep the asset purchases to a minimum and get some money for working capital. Consider what you absolutely must have to start.  People will understand if you don’t have a lot of fancy office furniture.  You can always buy more later.
4. Consider an additional credit card with zero interest.  This is usually a last resort, but with your credit score, it should be possible.  Then spend carefully.  After a few months of getting money in from patients and showing good financial statements, you might be in a better position to go to a bank and ask for a loan. 

I hope these suggestions help.  I know there’s no one magic answer; it’s a matter of persistence and flexibility.  Keep on – you will find a way.  Let me know if I can help or if you need my opinion on your business plan.

In addition, here are a couple of articles from StudentDC.com that might help:

Finding collateral for your startup loan   and   Obtaining an SBA loan guarantee. 

A fellow blogger wrote a post today about credit reports, saying you should avoid “Freecreditreport.com” because of the fine print.  Read her post here:  http://www.yieldingwealth.com/want-your-credit-score-be-prepared-to-pay-for-it/

Here’s a suggestion when you’re going to banks to apply for your practice startup loans:  Go to annualcreditreport.com and pay for the three FICO scores.  Then take the entire report, plus scores to each bank.  Show them the report instead of letting them “hit” your credit score. 

Here is a Chiropractic Economics article you might find helpful: 9 facts you need to know about credit

And here is a StudentDC article about Checking and Repairing Your Credit.

When I read an associate or independent contractor contract, I pay close attention to words.  I ask myself, “Is the meaning of this term clear?”  For example, I recently saw a contract that used the term “net collections.”  Do you know what “net collections” means?  Net of what?  Net means something is taken out, but what?

Today I saw an associate contract that used the term “earnings.”  I don’t know what “earnings” means, either.  Is it the amount of earnings (profit) of the practice as a whole?  Or is it (more likely) the collections attributable to a specific associate?  It’s much better to clarify assumptions now than to find out later that something didn’t mean what you thought (assumed) it meant. 

Don’t assume you know what a term means.  ASK.  Remember what “ASSUME” stands for - “ASSUME makes an “A**” out of “U” and “ME.” (sorry for ther terminology, but you get my point)

As I look at business plans, I notice that some grads try to tell the bank what terms they want for their loan - what kind of loan, how the loan package will be structured, even the term of the loan and the interest rate. I saw a business plan today that tried to tell the bank when a line of credit would be converted to a term loan. I’m not sure I understand the logic behind that. Another one stated that the borrower would pay back the loan over 10 years.

Good luck with that.

It’s about what the bank feels comfortable with and the kind of terms they usually give. For example, some banks might give you a line of credit for the whole loan, while some break it up into a term loan for startup, with a credit line. And some aren’t comfortable with credit lines; they want you to take the whole loan as a term loan (easier for the bank, and you have to pay interest on the whole amount.

Go with the flow, talk with several banks, and let them tell you. You can certainly negotiate with the bank, and try to get terms that are most favorable to you. But you aren’t really in a position to dictate, given that many banks won’t even talk with you. Just tell them how much you need and for what. Then take it from there.

It’s more important to get enough money.

Q:  Can I set up an LLC without an attorney? 

A:  Certainly.  Just go to the website of the Secretary of State for your state, find out the requirements, send in the forms and a check and you’re set.  Well, not quite.

You still must spend the time putting together an Operating Agreement.  This document is like a Partnership Agreement, and it spells out who is doing what with who and what happens if someone leaves the LLC or wants to be bought out.  On and on.  It is very important to get an attorney involved with this writing process. You can put together a draft and work out the issues, but have an attorney look at the document and listen to his/her advice.  If you have a single-member LLC, it may not be as important, but a multi-member LLC must have a signed operating agreement.  Don’t wait until you get “settled.”  Do it now. 

I’m not an attorney; my purpose is to help you get started with your practice.  Let me know if you have questions about this subject, or check out StudentDC.com  for more information about LLC’s. 

One of the first things a banker will want to do when you come in to talk about a startup loan is to check your credit.

You need to check your credit first to make sure everything is correct and that old negatives have been removed.  But credit reports are very confusing.  Here is a great video from  that takes you step-by-step through a credit report.

Read more about checking and repairing your credit on the StudentDC website.

This is a sad story I saw about a new DC in Wichita, Kansas .  Reading between the lines, it sounds like he got in too far with a lease commitment, then he couldn’t get patients in the door fast enough (or he couldn’t get them to pay) to meet his commitments.  If he had borrowed a little more and spent a little les on startup, he might have had enough money to pay his bills while he was building his patient base.

This is a classic example of “lack of capital.”  It can happen any time, but is most common in the beginning.  How do you overcome it?  A wise chiropractor told me “DSATM - Don’t Spend All the Money.”  In other words, dole out your loan proceeds very carefully, not spending on all your “wants” but focusing on the minimal needs you have in startup and the requirments to pay back your loans and make required payments (like the lease, utilities, etc.).  Then you’ll (hopefully) have enough money to pay your bills while you work to build up a good patient base.

This young doctor sounds optimistic.  I would encourage him to try again.  What do you think?

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