Two Common Choices for Starting Your Practice

By Bill Reddy, Director, AAAOM

The table below summarizes the pros and cons of a private practice vs. an independent contractor arrangement.

PRIVATE PRACTICE		INDEPENDENT CONTRACTOR
Pros	Cons	Pros	Cons
You have the freedom to design from the bottom up.	Usually must have initial cash outlay or small business loan.	Business is well established in the community.	You may have little say in the design/layout of your space.
100% of your income goes in the bank.	A significant amount of that goes toward overhead.	0 patients = 0 cash put toward rent/utilities, etc. Less risk.
You can choose to work alone, no personality conflicts.	You work alone…	Working with other healthcare professionals means referrals.	Potential personality conflicts.
You’re the boss – your staff works for you.	If a receptionist gets pregnant or quits, you have to deal with the administrative hassle of finding someone new and training them.	Receptionist staff is in place and is there to support you.	If they’re slacking off, you’re not in a position to reprimand them, even though a portion of their salary comes from your patient load.
You can create your own branding and clinic name.	You must pay for all marketing.	Marketing is part of the overall budget that your % of income covers (usually 40-55% of your gross).	You may have little say as to HOW the money is allotted toward marketing efforts, and the name of the clinic is already established.
You can decide to expand when your practice is ready.	Your initial space may be too tight for your growth.	Depending on your situation, you can “grow” into more treatment rooms.	If you have only two treatment rooms allotted to you, that’s all you get regardless of your patient-load.
If you lease, maintenance may be covered by your landlord.	If you own, you’re responsible for your own maintenance.	Maintenance is not your responsibility.