If you’re creating your own clinic from scratch, it can feel like a daunting endeavor.
Even if the rewards outweigh the risks, it can be tough to take the leap.
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You’re not the first person to have this dream, though, and you won’t be the last.
The fear of the unknown can be greatly reduced by educating yourself on what needs to be done when starting your own private practice.
Education is also a key factor to avoid common mistakes when starting a private practice.
Luckily, we’ve put together an outline to help you feel less in the dark about opening your private medical practice today, whether in a medical coworking space or the more traditional model.
Are you curious to learn more?
Below, you’ll find advice on what steps you can take to achieve your goal.
Choosing A Name For Your Practice
One of the first steps to starting your own medical practice is picking a name.
This is no easy feat; picking a name for your medical practice is like picking its identity.
In other words, it can impact your business’s reputation and success.
According to an article published by Forbes, your business name is “[…]the identity in which you’ll build a relationship with your customers, as well as a reflection of your brand”.
So, how exactly does one go about picking an appropriate name?
Well, there’s a few steps you can take.
Firstly, it’s important that you fully understand your target.
For example, you may consider whether your practice has a specific niche.
From there, you can get to work identifying the specific age range, location, and cluster of conditions common amongst your niche.
While doing this, it’s important to consider which vocabulary is most identifiable to your niche.
Certain words may work for one group while feeling inappropriate for others.
You can think of your name as a way to flag down your target audience and let them know that you’re there to serve them.
Additionally, it’s often useful to 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 (as well as their mistakes).
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You’ll also want to make your business name 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.
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Additionally, last names that are tricky to spell are typically more difficult for people to remember and to find your clinic in a search engine.
One tip is to keep your business name short and sweet.
A short name can be powerful and leave a lasting impression.
Additionally, you may find it useful to 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.
A unique name is another way to help your business stand out, as well as make it easier to trademark your name.
Your business name should also outline your identity in order to send out a unified message about your practice’s identity.
You can work to make your logo, name, and tagline cohesive.
Finally, it’s important to think about your future.
Consider your long term goals when naming your practice.
Additionally, your final naming decision may be influenced by whether you want to keep your practice small or grow it to a national brand.
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.
The consequences of using the same name as another business can range from a marketing disaster to a lawsuit.
The best way to avoid that is by ensuring your business’s name is truly one of a kind by searching the internet.
Not only is the internet an excellent tool for digital marketing, but it can also tell you if your business name is already in use.
In addition to using a search engine, be sure to also check 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.
It may also be useful to check national name databases, such as the United States Patent and Trademark Office (USPTO), the National Corporation Directory (NCD), and the United States Business Registration.
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.
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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.
Sole Proprietorship
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, and 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.
This is easy to do as there’s no legal distinction between you and your practice.
In this form of taxation, you’re 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 startup 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
A limited liability company, or LLC for short, 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.
Your practice has a hybrid legal entity by becoming an LLC.
This offers you the freedom and flexibility to find what works for your practice.
Traditionally, LLCs are a great match for sole business owners.
Owners looking to form an LLC must adopt an operating agreement to clearly outline their dos and don’ts of operations.
Next, they 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
However, we’re not suggesting 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, they can have layers of uncertainty.
This is why it’s important to know your circumstances and the laws around them to avoid issues down the road.
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.
The International Revenue Service (IRS) offers this service 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 is available to any individual or entity that is 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.
According to an article published by Forbes, a registered agent’s primary role is to maintain your business’ legal documents.
You can 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.
If you’re stuck with where to start, check out websites such as FreeRegisteredAgent.com.
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.
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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
You must submit your required documents to your state’s business division before your LLC is made official.
You can fill out your own registration and submit it either online, through the mail, or you can hire a service to file and submit it for you.
The average cost to start an LLC is approximately $100, depending on your state.
Jurisdiction Differences
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:
Step 1: 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.
If you’re looking to set up an account, your first step is to visit their website.
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.
Step 2: Register With The 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 MyTax.DC.Gov portal.
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 takes approximately a week to approve, and you will be notified in the mail.
Step 3: 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.
One of the last steps in getting your business approved is obtaining a BBL.
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.
Contact Symbiosis To Start Your Own Private Practice Today
Does that sound like a lot?
Many people feel overwhelmed with dealing with the hassle of government bureaucracy.
If you add the high pressure of a corporate health job you might be trying to work your way out of, 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
We also offer a medical coworking space to help save you both time and money.
RELATED: Top Benefits Of Starting Your Private Practice In A Medical Coworking Space
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.
Contact Symbiosis today and let us take care of the heavy lifting in starting your own private practice.
Symbiosis
1331 H St NW Ste 200,
Washington, DC 20005
(202) 794-6820
– https://goo.gl/maps/Xw6ezHdx53iDi8T98
Our Practice In A Box solutions take all the headaches out of opening and scaling your own private practice. We provide the clinic medical coworking space, operations, management, and more. Do what you do best – practice medicine – and leave the rest to us. From start to finish, we make sure your business is ready and thriving. This is what makes Symbiosis the smarter choice.
