Creating your own clinic can feel like a daunting endeavor.
Even if the rewards outweigh the risks, it can be tough to take the leap.
You’re not the first person to have this dream, though, and you won’t be the last.
Educating yourself on what you need to do can greatly reduce your fear of the unknown.
Curious to learn more?
Read on below to find out what your first steps towards your goal should be.
Choose A Name For Your Practice
When it comes to starting your own medical practice, one of the first steps is to pick a name.
Picking a name for your medical practice is like picking its identity, it can impact your business’s reputation and success.
Below are a series of tips to consider when picking your name:
Know your target – does your practice have a niche?
Does this niche have a particular age range, location, or cluster of conditions?
If so, consider what verbiage is identifiable for them.
Certain words may work for one group while feeling inappropriate for others.
Think of your name as a way to flag down your target audience and let them know that you’re there to serve them.
Pay attention to what your competitors are doing – if you have competition in your locality, keep in mind what words and logos have worked for them.
This doesn’t mean that you should copy any other businesses in your area, but you should note what you can learn from their success.
Make it recognizable – many physicians chose their last name as their business name and there’s nothing wrong with syncing your name with your practice.
However, keep in mind that if you’re not already known in your community, your last name may not generate much buzz.
Also, if you have a last name that’s difficult to spell, it could make it difficult for people to remember and to find your clinic in a search engine.
Keep it short and sweet – a short name can be powerful, and leave a lasting impression.
Keep it professional – we’re not saying that you can’t have fun with your name, but try to keep it clear what your practice is.
If you can find a name that speaks to your specialty, and is clever, then you’ve hit the jackpot.
Make it unique – this will help you to stand out and will make it easier to trademark your name.
Outline your identity – You want to send out a unified message about your practice’s identity.
Work to make your logo, name, and tagline cohesive.
Think about your future – consider your long term goals when naming your practice.
Knowing whether you want to keep your practice small or grow it to a national brand can affect your final naming decision.
Has your Name Been Trademarked?
Once you’ve landed on a name for your practice, it’s time to register your brand.
It’s important to go through the proper channels to check that your name isn’t already in use.
Using the same name as another business can range from a marketing disaster to a lawsuit.
Ensure your business’s name is truly one of a kind by:
Searching the internet – this is one of the easiest ways to tell if your name is taken.
Be sure to not only check in a search engine but also social media handles.
A quick internet search can show you if someone else is using a similar name, and where else in the world your name may be used.
This is something to consider if one of your goals is to expand into other regions.
Check national name databases – databases like the United States Patent and Trademark Office (USPTO), the National Corporation Directory (NCD), and the United States Business Registration are a great tool for checking if your name has already been used.
Pick a Legal Structure for your Practice
Once you’ve found a name, it’s time for you to get to work on choosing your legal structure.
It’s incredibly important to decide whether you want to establish a business entity under a legal structure or operate as sole proprietorship.
Are you looking to maintain a group practice, solo practice, a limited liability structure, or a corporation?
Each option comes with pros and cons for your practice.
Your legal structure will determine how your income will be taxed and what legal regulations you need to be in compliance with.
These decisions often spark debate amongst medical practitioners, but two of the most commonly chosen legal structure are a sole proprietorship, or a limited liability company.
A sole proprietorship offers you both more control over your practice and more personal responsibility for its operation.
As the sole proprietor you and you alone own and run your practices, there is no legal distinction between the owner and the business entity.
When it comes to taxes, you participate in what is known as pass through taxation.
This is where you file your clinics taxes along with your own personal income taxes, easy as there is not legal distinction between you and your practice.
In this form of taxation, you’ll be taxed on your total income minus your expenses, whether you withdraw from your business accounts or not.
Your business must report all income gains and losses, and you are able deduct your expenses such as advertising costs, operating expenses, equipment acquisition, travel expenses, and start up costs.
It’s up to you to keep your records up to date and identify your business records separate from your personal.
We suggest keeping separate checkbooks for your personal and business expenses.
Limited Liability Company
An LLC is a legal structure that combines aspects of a partnership with the limited liability of a corporation.
It allows you to choose whether to be taxed as a corporation, partnership or a sole proprietorship depending on how you choose to classify yourself to the Internal Revenue Service and your State government.
By becoming an LLC, your practice has a hybrid legal entity.
This offers you the freedom and flexibility to find what works for your practice.
Traditionally, LLCs are a great match for sole business owners.
To form an LLC, the owners must adopt an operating agreement as a way to clearly outline their dos and don’ts of operation and then must file the operating agreement with the appropriate local and federal authorities
LLCs are generally required to have centralized management, limited liability, transferable interests, and continuity of life.
If you’re still feeling a little foggy about why many people choose the LLC route, allow us to point out some advantages that LLC’s offer over corporations:
- You have more ability to allocate gains, losses, and income
- You are not restricted to a certain number of owners
- You can factor in your liable debt when filing for tax deductions
- Your practice doesn’t require special tax elections to pass income through your owners
- Your practice will often have no restrictions on who can own LLC interests.
- You can have different classes of owners
- Your contribution and distribution rules are more liberal
- Your personal assets can be separated from your business assets
That’s not to say that LLCs don’t come with any disadvantages.
It’s important for you to thoroughly consider what may work for your individual situation.
Because LLCs are formed around your needs, LLCs can have layers of uncertainty.
This is why it’s important to know your circumstances and the laws around them to avoid issues later on.
We highly recommend talking to an attorney when deciding on the best legal structure for your practice as we are not attorneys ourselves.
Get Registered With The IRS
Your Employer Identification Number (EIN) is like a social security number for your business.
You’ll need to apply for your Employer Identification Number (EIN) for tax purposes.
Applying for your EIN is a service that is offered by the Internal Revenue Service (IRS)
Beware of websites that offer this service at a fee, as the IRS already offers it for free.
When applying for your EIN, you must include your taxpayer identification in your application.
This can mean including your SSN, an ITIN, or even the EIN of the granter, general partner, principal officer, owner, or trustor.
The individual or the entity that is appointed as the “responsible party” will be in control of the application process.
Many folks prefer to apply for their EIN through the internet and it’s a fairly smooth process.
Once the applicant’s information is validated, they host an online session and an EIN is issued almost immediately.
This online application process may be used by any individual or entity that is located in the United States.
Get A Registered Agent In Your State
It’s required by law for you to have a registered agent in your jurisdiction to aid your business in maintaining corporate compliance.
Your registered agent will inform you of any legal notices and will remind you of annual reports that need to be filed.
Think of your registered as your safeguard.
It’s their job to keep you compliant, so you can keep your focus on providing the best service possible at your practice.
Without them, it’s easy to miss messages or deadlines for important legal actions.
A registered agent can cost up to $320 a year, but there are services that offer a free year.
Check out FreeRegisteredAgent.com for example.
Setup Operating Agreement
An operating agreement is a key aspect of your business model.
Common factors included in an LLC operating agreement are:
- Your management structure
- Your members investments
- Your division and sharing of profits
- Your tax considerations
- Your number of members
These are just general guidelines; depending on your practice, you may need to outline more factors.
In the case that your practice has multiple members, an operating agreement acts as a binding contract.
It can also help keep all members up to date with the expectations of your practice.
The conversations that you have with your partners in creating an operating agreement may be difficult at first, but they’ll prevent bigger issues down the line.
Using Operating Agreement Templates
There are plenty of operating agreement templates online you can use.
Be careful, though.
The operating agreement is one of the most important elements of your practice, so be sure to have an attorney look it over to make sure it’s set up properly.
Register Your LLC With Your State
To make your LLC official, you’ll need to submit your required documents with the state’s business division.
You can fill out your own registration and submit it either online, through the mail, or you can hire a service to file submit it for you.
On average it costs $100 in fees to start an LLC, but the amount can vary based on the state you’re in.
This process can differ from state to state, so pay attention to the requirements of your chosen state.
The name of your packet of required submission documents can also vary from state to state.
So, there are plenty of alleys for confusion.
Your state may call them Articles of Organization, a Certificate of Organization or even a Certificate of Formation.
It’s also possible to register your LLC within a state that you don’t live in, but your registered agent must be from the state of registration.
So, keep a keen eye on what your jurisdiction needs from you.
Registering An LLC In Washington DC
If, like Symbiosis, you’re located in Washington DC, this is how to form your LLC.
Set Up An Account With The DCRA
The Department of Consumer and Regulatory Affairs (DCRA) is an organization in place to ensure the health, safety, quality of life, and economic interests of DC residents.
They enforce a code of compliance to aid businesses’ in delivering the best services to their clients.
Visit their website and create an account.
From there you’ll need to file your business formation documents.
No matter what form your business takes, if you’re in DC, you’ll need to obtain a Home Occupation permit or a Certificate of Occupancy.
Register With Office Of Tax And Revenue
Once formed you must register your practice with the DC Office of Tax and Revenue (OTR).
Here you’ll fill out form FR 500, and file it online using the portal titled MyTax.DC.Gov.
On the FR 500, you’ll answer a series of questions and the online system will register your practice for the appropriate taxes and will inform you of when they must be filed.
Overall, this process can take approximately a week to approve and you will be notified in the mail.
Obtain a BBL
A Basic Business License (BBL) is another license that is required for you to open your doors.
Without it, your business could face fines and penalties.
Obtaining a BBL is often one of the last steps in getting your business approved.
You must already be approved by the DCRA, be registered by the Office of Tax and Revenue, and receive your certificate of Occupancy or Home Occupation Permit.
Symbiosis Makes It Simpler
Does that sound like a lot?
Dealing with government bureaucracy is always a hassle, and can be overwhelming.
Add to that the high pressure of a corporate healthcare job you might be trying to work your way out of, and it might seem like too much to deal with.
Here at Symbiosis, we understand, and we’re here to help.
If you’ve always dreamed of starting your own healthcare practice but don’t know where to start, why not start with a consultation with one of our healthcare practice consultants?
We can help with a wide range of aspects of managing your clinic, including:
- healthcare digital marketing
- Choosing your clinic location
- How to run a successful healthcare llc through systemization
- Avoiding the hidden costs of starting a medical practice
- Simplifying your practice finances
- And much more.
Contact Symbiosis today to find out how we can help you start and grow your private practice.
It might seem like a lot of work, but it doesn’t have to be.