Issue 4 - March 2003

Just starting your professional career?
A word to the wise
By Stanley Greenfield, RHU

I get a lot of calls from new chiropractors from all over the world and some of the questions are quite unique. Some are not so unique and a little common sense would go a long way toward solving the problems they face. With that thought in mind, I thought I would put a few of those “words to the wise” answers together and share them you.

• Get insurance early. If you are thinking about buying a practice and you need financing to accomplish this, apply for insurance coverage now. You need life insurance and disability coverage before the bank will release funds to you. Under-writing a policy can take as long as two months – sometimes longer, depending on your medical history.

• Get an umbrella. Not the kind that protects you when it rains – the kind that protects you in case someone decides to sue you because he fell walking up to your house or office.

Sound like an expensive policy? It is only if you don’t own one. You can get a $1,000,000 umbrella policy for less than $250 per year. You may not need some of the other stuff you have but you need this policy. Call your agent and check it out.

• Get a good insurance agent. While you are on the phone with your agent, ask for a complete review of all of your policies and then ask for any suggestions that she might have concerning your policies. You need an agent who is going to keep your program up to date and always make sure you are getting the best for your buck.

• If you are buying a practice, make sure that you are not purchasing an “expensive job”. Make sure that the cash flow in the practice will not only support the practice, but it will also support the payback of the loan. Sometimes you would be better off starting your own from scratch.

• Review your contract carefully. If you are considering ignoring that “non-compete” clause in the associate contract because you have always heard that they are not legal, take a good long look at the last paragraph in the contract. In almost every contract the last paragraph states that you have read the contract and understand everything and will comply with the entire contract.

Be careful with that one. If you want to stay in the community and the non-compete clause says that you cannot, then maybe you either need to discuss this further with the doctor or look elsewhere.

• Write a real business plan. Got a business plan? Not the one they made you do in school – a real one. A good business plan is like having a good map that shows you how to go from where you are to where you want to be. It is a living document that you need to constantly update.

Do you have a marketing plan? You need one of those too. You need to know what your marketing efforts will be for the next six months so you can make plans ahead of time. No more last minute decisions that only result in spending money for very little results.

• Deal with your student loans. The question is, “What is the best way to deal with them?” Putting off repayment is not a good option. Postponement takes a large loan amount and allows it to grow even bigger.

My suggestion: Consolidate as soon as you graduate. Once you do, the interest goes from compound to simple interest. Consolidating also lets you take advantage of historically low interest rates. I would also suggest that you consider using the “income-contingent” payback method. That bases your payment on your income, so in the beginning your payments are much lower. You can always pay in more, but your required payment is lower. That is an option that you really need when you first get started.

• Build a cash reserve. Don’t be in such a hurry to be “debt free” since that usually runs hand in hand with being “asset-free” too. Build a cash reserve or emergency fund for yourself. Opportunities present themselves to those who have cash.

I hope that these words to the wise have been helpful. There are lots of things to consider before that first patient walks in the office. You want to make sure that they come back!

Stanley Greenfield is a registered financial consultant and a registered professional disability and health insurance underwriter (RHU). He is president of Greenfield’s Financial Power Program and offers financial and practice management to the chiropractic community. He can be reached at 800-585-1555.