By ATMS Vice President , Robert Medhurst
You’ve graduated as a natural medicine practitioner, you’re excited and you are ready to set up your practice. What do you need to think about to get your practice set up and running well? We have compiled a list of the first three things you need to consider to ensure you set up your practice effectively.
1. Type of Clinic – Home, Shared Clinic or Room Rental?
Working from home is often seen as an affordable option when you first set up your practice, particularly if you don’t have capital to fund your setup. Make sure that you can have a dedicated space and that your clients will have access to toilets and possibly a waiting room. If premises are rented check your lease to make sure a commercial activity is permitted and also check your insurances to see if they cover you and any employees if you are working from home.
If you own the property ensure that you submit a development application to local council before you set up your business. You may also want to establish a separate phone line. Check on whether using the house for a business will potentially attract a liability for capital gains tax on sale on the ATO website.
Renting a room in a joint practice is a popular option. Initially, you should find out why the clinic needs another practitioner. If this is because the practitioners in the clinic can’t effectively service the clinic’s client load, then this is to your advantage. If the clinic needs another practitioner because the main practitioner wants to move on to other things, then this may not be to your advantage, as the clients you’d be seeing may be those who were formerly served by that practitioner, and many of them may be reluctant to be seen by a new and unknown practitioner.
You should also determine if the policies and procedures used in the clinic, or the way the clinic operates, suits the way that you want to work. Examine the consultation booking history carefully but be aware that you should be the main generator of your own client bookings.
You should not rely on the clinic or other practitioners within the clinic for referrals . If the clinic will refer clients to you, you should find out how these clients are allocated. Is that allocation fair? Are you only being referred difficult clients who have done the rounds of the other practitioners in the clinic? You should make sure that clients who come to the clinic in response to the marketing that you do for your own practice within the clinic are only seen by you and not referred to other practitioners within the clinic.
Also make sure that you carefully check that the clinic has the appropriate insurance for factors such as public liability and ensure that the other practitioners in the clinic have the appropriate professional indemnity insurance.
2. Choosing your Clinic Location
What’s important to you when you visit a practitioner? Is it ease of access, that it is fairly local or is it their expertise? When first establishing your practice think about the factors that are critical to you when choosing to see a practitioner and evaluate the options against this list. Ideally you would consider the following factors;
- Proximity to public transport, which if it’s close, allows better access for those who use public transport.
- Proximity to potential referrers such as health food stores, gymnasiums, pharmacies, medical practices, weight loss clinics, hair dressing salons or any other businesses that may be able to refer clients (this should be a reciprocal arrangement). It’s also beneficial to be located near a major shopping centre.
- Visible location. This assists when directing new clients to the clinic, and is valuable for the visibility of signage.
- Regulations related to signage. Some council zoning areas have restrictions on advertising, and there may be limitations on the type and size of signs that may be used. For example, some councils that oversee the activities of districts which have a preponderance of older buildings will only allow signage that is in keeping with the style of those buildings or the era in which they were constructed.
- Ground floor This makes attending the clinic easier for disabled clients.
- Liability-proof Look for potential health and safety problems that may be associated with the premises. These may include things such as:
Walking surfaces that may become slippery when wet.
Obstacles protruding from the floors or ceilings.
Awkward or slippery staircases.
- Attractive These make people feel more positive about attending the clinic.
- Easy access to car parking facilities is an important consideration. Undercover parking is preferred, and if this is available you should be aware of the hours of operation, parking charges and security etc. Information should be sought from the local council regarding any levies imposed upon business owners by the council for the provision of parking facilities.
- Local population characteristics. You need to ensure that the types of people who populate your neighbourhood are those who have the means and motivation to seek your services. This can be determined by talking with local health food and pharmacy staff, as well as other practitioners.
3. Deciding your Business Structure
Are you planning on operating as a sole trader, partnership or through a limited liability company? Each of these structures has advantages however often the simplest structure (sole trader) may be the most cost effective when you first set up practice.
The major advantages as a sole trader are that it is easy to setup and stop trading, that losses may be offset against other income and that there are some concessions on capital gains if the business is sold. As a sole trader you can organise the business to suit your requirements. The major disadvantages also relate to tax and largely limit your ability to manage your tax bill as you will pay tax at the personal rate, you also are restricted to using your own capital and assume liability for any claims. It is critical with this structure that you do have professional indemnity insurance to protect yourself.
A company structure has the advantage of creating limited liability for its owner and being able to be easily sold or being able to sell shares potentially to raise capital. You will need appropriate legal and financial advice to use this structure and will need to speak with an accountant about how to set it up appropriately. Ongoing costs involved in a company structure tend to be higher as well.
Partnerships and trusts may have advantages from a tax perspective however the major disadvantage with a partnership is the concept of “joint and several responsibility” meaning that both you and your partner are liable for each other’s actions. Typically a company structure may be preferable in this case.
About the Author
This story has been republished here with permission from the author Robert Medhurst, Adelaide Hills Naturopath.
Robert Medhurst, is an experienced practitioner who has setup numerous clinics and is the author of The Business of Healing which is currently in its third edition. His clinic is based in the Adelaide Hills and details of his practice and his text are at http://www.adelaidehillsnaturopath.com.au/
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