Phase 1: Setting Up Your Business

FIRST STEPS: MISSION AND FINANCES

1. Business

1. Know your mission: 
   The first challenge of DPC is identifying what you want your practice to look like. With no health system protocols or insurance regulations to restrict you, your options will be limited only by your imagination and what your patients will support. Given that flexibility, you will want to clearly define your practice's mission early in the process.  It's important to know the patients you want to serve, the types of care you want to offer, and your professional expectations before you start.  That will help you determine where you should locate your practice and how much you will charge for memberships.

2. Make a financial plan: 
   Once you’ve decided where to locate your practice and how much you will be able to charge the population you want to serve, you will be able to create a financial plan for transitioning to DPC. The finances of transitioning to DPC scare away many physicians. It is almost impossible to avoid a substantial decrease in income during the transition. The cost of starting the practice could be as low as $5,000 if you focus on home visits and don’t hire staff. It could be hundreds of thousands of dollars if you want to hire staff and build or rent an office.

BUSINESS DECISIONS: NAME, TYPE, AND LOCATION 

Choosing a Practice Name

Even the seemingly simple step of choosing a practice name requires careful consideration.  Your practice’s name is key to its marketing, especially in the age of the Internet.  You want a name that is easy to pronounce, spell, and remember. It is worth taking a moment to Google the name you're considering to see what would appear when patients search for you online. You also have to consider whether your business name should include “direct primary care,” a term that may not be well-known in your area.  Including “direct primary care” or “DPC” in the name will make your practice more likely to be found by locals who are using Google to search for a DPC clinic. Including your own name in the practice name allows you to trade on your local reputation, but may complicate things if you expand and take on partners.

What's in a practice name? 
Quite a lot, actually. But don’t let this step be your biggest stumbling block. Before you launch into a naming brainstorm, it’s helpful to answer these two important questions:
- Do you plan on adding additional physicians in the future?
- Do you plan on expanding to additional locations or cities?

If you answered “yes” or “maybe” to either question, you may want to avoid including your name or the city you’re based in as part of your practice’s name. Additionally, as more DPC practices emerge in your area, your name could work against you when it comes to online discoverability.  It’s best to keep your name simple, clear, and friendly towards future growth. Come up with a shortlist of options, get input and feedback from a trusted inner circle or key stakeholders, and go with the option that people can rally behind.  

How to pick a DPC Practice Name

Choosing a name for your new DPC clinic may seem trivial but it can be nerve racking for many. Obviously, you want something that sounds catchy and really shares your DPC passion but also is unique. Easy right? Here are some starter tips to get you thinking. 

First, start brainstorming with your friends and family. Think about why you’re doing DPC? What is your passion? What about your own personal name, is there something there you can use? Think about your community or location, is there something there you can use? Write ideas down. Say them out loud. Do they sound good out loud? Consider searching the DPC Alliance directory for names to get some ideas. And if you are really loaded with cash or crunched for time there are crowdsourcing sites like squadhelp.com that you can pay to help you come up with a cool name. 

Ok, you got a name and then you go to search for the name among the thousands of clinics, or purchase the name for a trademark or website, etc, and it’s taken. It is important to make a list because the next step is to take the list of all the names you came up with and search out your new name on the internet. Is your name taken already? Just do a Google search. What pops up? Check other search engines too. 

Next, search your name on the GoDaddy site or another domain purchase site. Can you buy your domain? Just because you don’t see you name come up on a Google search doesn’t me you can buy it. Some names especially some with the words health or care or wellness in them will be premium domains. Is the domain name available and reasonably priced? No debate here on .com or .net or .health domains. Pick one you like and can afford knowing that .com are just way more common. Now check on social media sites like Facebook, twitter, Instagram or LinkedIn? Can you use your name there? You’ll need those later for marketing, though your exact name is not as critical for those. 

Finally, you should check your Secretary of State’s website for companies in your state with the same or similar name? If you want to have an LLC or similar in your state you need the name to be available. Also, if you have any ambitions to grow you DPC business into an empire maybe you should consider doing a trademark search. It takes a unique name to be trademarked. Along this line, if you may expand locations or add additional services like aesthetics or counseling would your name still fit? You should think bigger than you are right now. 

Your office name is important but it shouldn’t plague you with regret. We hope these simple tips will help guide you to a great clinic name. Be sure to share you name ideas with your Alliance colleagues and get their reviews too. Now, get busy.

Once you have selected a name, you can register a domain name online to establish your practice website. The largest online registrar is GoDaddy.com, but there are also alternatives such as SquareSpace.com, Wix.com, and Bluehost.com that offer different pricing and privacy features. For more details, visit https://www.wpbeginner.com/beginners-guide/how-to-register-a-domain-name-simple-tip-to-get-it-for-free/. 

There are also online resources explaining how to register a domain name and set up a website for your practice.

Another decision you need to make is the location of your practice. Those starting with a small budget might need to consider using home visits, having an exam room at a local nursing home, or renting a room or two from a local practice. For those starting with more capital, renting or buying an office may be better options, as they allow you to set up a permanent location right away and begin to shape a more durable brand. Reflecting on the mission of your practice will help you select the location and office arrangement that is right for you. Try to go where your target patients are. But if you have a non-compete clause in your current contract, you need to consider that as you select a location. 

Practice Location 

A saying about retail enterprises is to consider “location, location, location.” And the location is that important to your success. Where you decide to open your clinic in terms of city/town is largely up to you. There is no one recipe or one right answer. It is logical to assume that if you move to a community completely new to you and open a practice, your growth will be more challenging. Physicians who have done this have had varied experiences. It also seems logical that if you open a practice in your hometown, growth will come more naturally. This, also, is not always the case.

Lease or Buy (or Free!)
For the most part, the best recommendation for an entrepreneurial start-up is to stay as financially lean as possible. What does this mean? Spend as little money as possible and commit to as few ongoing expenses as possible. If you can’t afford it now and you don’t absolutely need it, don’t buy it, lease it or sign a contract for it. The Lean Startup is a great resource on this topic. 

1. Free: if you can find a room in another health-related space and trade care for office space, this is the leanest start-up option possible.
2. Rent a space: find another physician or other business that will sublet space or a room in their office to you
3. Buy or rent a Facility: find a building to buy or rent

Get Incorporated

Once you’ve landed on a great name for your practice, it’s time to make it official by registering your business. To do this, you’ll need to draft up articles of incorporation to establish the existence of your business. 

First, you’ll need to decide where to incorporate. While you do not have to physically operate your business in your state of incorporation, you do need to have a registered agent in that state. 

The structure of your business will depend on each state's unique set of guidelines, so be sure to check if you’re required to operate as a professional entity—either a professional corporation (PC) or professional limited liability corporation (PLLC). If you intend to grow your practice by adding other physicians or practitioners, this structure may be advantageous for you. 

Another option is to form a limited liability company (LLC). If you decide to form an LLC, you’ll need to file articles of organization instead of articles of incorporation. 

Online legal services like LegalZoom are a great resource to lean on for this step. They make the process of incorporating and selecting a registered agent in one of these tax-friendly states simple with templates for articles of incorporation and organization, operating agreements, and EIN forms. 

Click on the link to view and/or download the document. NOTE: You will need Adobe® Acrobat Reader to view the document. Download the latest version here.  

IRS-Form_Ss4_169.pdf 
LLC-Articles_Of_Organization_LA.pdf 
LLC-Operating_Agreement_Mbrs_LA_0.pdf 
LLC-Operating_Agreement_Mgrs_LA_0.pdf 
EIN-Confirmation_Letter_25.pdf 

Apply for an EIN

An Employee Identification Number (EIN) is used by the IRS to identify a business entity. If you answer “yes” to any of the following questions, you need to apply for an EIN: 

• Do you have employees? 
• Do you operate your business as a corporation or a partnership? 
• Do you file any of these tax returns: Employment, Excise, or Alcohol, Tobacco and Firearms? 
• Do you withhold taxes on income, other than wages, paid to a non-resident alien? 
• Do you have a Keogh plan? 
• Are you involved with any of the following types of organizations? 
• Trusts, except certain grantor-owned revocable trusts, IRAs, Exempt Organization Business Income Tax Returns 
• Estates 
• Real estate mortgage investment conduits 
• Non-profit organizations 
• Farmers' cooperatives 
• Plan administrators 

The good news is that the IRS makes applying for an EIN relatively straightforward. You can start the application online through the IRS website here. 

You will also need to obtain a state tax ID. To register a new business with the Louisiana Secretary of State, at https://geauxbiz.sos.la.gov/. 

Creating a Legal Entity and Obtaining an EIN 

The first official step in opening your practice is to create a legal entity. The regulations surrounding this process vary by state, and it is important to note that even if you are not set on a name, you can choose a name and then later file a “doing business as” (DBA) if you end up choosing a different name. Some opt to do this independently using Legal Zoom or directly with the Secretary of State; others opt to use a lawyer for their entity creation. In some states, a simple LLC is all that is required. Check your state laws for specifics or allow your lawyer or CPA to guide you in what may be required in your state. 

Your business type will affect your tax classification. Consider hiring a CPA that understands DPC — or small business management at a minimum — to help decide which legal structure is most beneficial for your clinic. The Small Business Administration (SBA) is another highly beneficial resource; you can browse their website or set up a (free!) business coaching session locally. 

There are several IRS business structures to choose from. 

• Sole proprietorship 
• Partnership 
• Corporation  
• S-Corp 
• C-Corp 
• Limited Liability Company (LLC) 

You’ll want to review the differences between these at length before selecting one. Most DPC practices start as an LLC. Your business structure affects how you pay taxes, raise capital, and even your personal liability. As your business evolves, your structure may change. 

After you choose a structure, you will file for a federal tax ID number (FEIN or EIN). It’s free to apply and simple to do. You will need your EIN before you can apply for a business bank account, credit card, any business licenses, permits, etc. You will also need it when you sign up for vendors such as pharmacy wholesalers and medical supply companies. Do not delay this step 

Designate a Registered Agent

A registered agent is a business or individual who has been elected to receive any service of process for your business, should it be involved in any legal action. 

A Registered Agent is necessary to receive service of process on lawsuits.  All business registrations with the Secretary of State require, by law, an agent with a physical address in Louisiana. An agent, or as it is sometimes called, registered agent, can be almost anyone of legal age and a legal resident of Louisiana. An agent is someone that is designated to receive legal documents served on the business in the event of administrative or legal action. An agent has an obligation to forward the “legal documents” to the business. An agent’s name and address are publicly available and are displayed on the Secretary of State’s website. 

Individuals that can be designated to be an agent include, but are not limited to, an organizer of a business, a member of an LLC, an employee of the business, an attorney or an accountant. 

Write your business plan

Once you’ve got a handle on the must-do logistics outlined above, it’s time to start thinking about the future of your practice. Outlining a business plan will help you think critically about your practice and the value you hope to provide and get specific about milestones and metrics for success.  

Additionally, a solid business plan is essential if you’re planning to apply for business loans and grants, or if you plan to do any fundraising with help from investors. 

The Small Business Association provides great insights and sample plans to help support you as you craft your own plan for your practice. And if you have any finance-minded folks on staff or in your network, it’s a great idea to get them involved as you’re drafting up the plan. 

Writing a Business Plan 

The elements to include: 

1. Summary of your business—a snapshot. What is your “Why?” Why will your DPC be the best? Your business success will be directly related to answering this question. Consider reading Sparks Start Fires by Julie Gunther, MD or Start With Why by Simon Sinek. 
2. Description of DPC and how it relates to your own business. 
3. Market analysis—Research, research! How are DPC practices around you doing? How full are they? How fast was their growth? What are some of their obstacles to success? How much are they able to charge? 
4. Services—What you will include in your practice and how will it be advantageous to your practice. (See Choosing Clinical Services) 
5. Marketing strategy—Research effective marketing. Most DPC practices build by word of mouth and boots on the ground. Keep marketing expenses to a minimum. Ask your mentor (See How to Find Your DPC Mentor 
6. Funding request—How much money do you need for your plan? Hopefully, starting out, this number is very very low. Start with the lowest start-up costs possible (See Financial Considerations) 
7. Financial projections—Calculate estimate based on membership rates, projected growth and retention rate, and overhead costs. 

Explain why you care about DPC and your patients, the positive impact on the community, and how your passion will drive your growth and financial estimates. 

Don’t forget to reach out to your mentor(s) for advice if needed! 

Set Your Goals

Clear, measurable goals are like the North Star for your practice. They help you gain clarity around the work that needs to be done, hold your team (and yourself!) accountable, and track all the progress you’re making. 

While you can probably fill up page after page of goals you’d like to achieve at your practice, we recommend making them all SMART: Specific, Measurable, Attainable, Relevant, and Timely. 

To get started, check out this great module in our DPC Accelerator Workshop, How to Set SMART Goals. In it, you’ll learn: 

• How to evaluate your business goals compared to other DPC practices like yours 
• How to set a SMART goal 
• How to get your team to commit to at least 2 SMART goals and measure outcomes 

Here’s an example of three solid SMART goals: 

• Grow patient panel - Design a referral program to support the growth of my practice by 5 new referrals per month, resulting in at least 2 new members per month beginning September 2021 
• Increase revenue  - Offer new services (medications, labs, health coaching) to increase ancillary revenue to $2,000 per month consistently by November 2021 
• Deliver stellar service - Ensure a remarkable patient experience by delivering monthly staff training that will improve our NPS score from 60 to 70+ by mid-year  

Notice how each of these is specific, measurable, timebound, and tied to key pillars of the business plan. That’s what you’re aiming for! 

We recommend using our sample SMART goals worksheet as you begin narrowing down your practice’s goals.

Open your business bank account

Now, onto the finance side of launching your practice. You’ll want to use your newly acquired EIN to open a business bank account at the financial institution of your choosing. 

It’s critical to keep your personal and business expenses separate. It helps you accurately understand if your practice’s expenses are tracking with your budget and makes it easier to identify business costs—think transportation, office supplies, and classes or seminars—to write off at the end of the year. 

Plus, keeping your practice’s expenses in your business bank account will make a world of difference when it comes time to file taxes.

Apply for a business loan

Building and expanding your practice takes a lot of work—and money! It’s common for a budding business to quickly burn through its initial capital, and that’s when business loans come to the rescue. 

As a small disclaimer, you should always consult the financial experts in your network before proceeding with a loan application. The information provided here is intended as a general primer, not financial advice. 

When you start talking to lenders, one of the first things they’ll ask about is your credit score. It helps the lender assess the relative risk of issuing you a loan, and what interest rate you can expect to pay on the loan. 

But your credit score doesn’t tell the whole story, so you’ll also be asked to provide other information—how long you’ve been in business, the amount of money you make with the business, proof of your ability to make payments, or if you have collateral to back the loan. 

From there, determine the type of loan you’ll be applying for. It’s easier to think in terms of what you’ll be using the money to accomplish—and it will likely land in one of the three categories below: 

• Starting your business, which includes registration or licensing fees, renting an office space, buying equipment, and building a website 
• Managing day to day expenses, including employee salaries, utility bills for your office, and marketing and advertising 
• Growing or expanding your business, which might include renting another office space, hiring headcount, or investment in a new service offering 

Finally, compare your lender options. The good news is that your local bank is no longer the only option. Be sure to broaden your search to include online lenders, regional banks, and microlenders to learn more about who is the best fit for your practice. 

Once you’ve decided on a lender and the type of loan that’s best for you, prepare all of the documentation required to apply. Your lender will be able to tell you specifically what they need, but this checklist from Guidant Financial is a helpful starting point. 

Two other helpful resources include The 6 Best Medical Practice Loans from Fundera, and business loans from a merchant processing company, Stripe, who offer repayment terms based on your practice’s sales volume. 

Get Insured

Just like homeowners insurance, health insurance, and auto insurance, insuring your practice is meant as a way to protect your business in the event of an accident or other emergency. Because you’ll be operating a business in the healthcare space, making sure you’re properly insured can help protect you, your patients, and your employees. Simply put: don’t skip this critical step! 

There are several types of insurance unique to medical practices that you’ll want to research and consider, including: 

• Malpractice insurance. This is a must have! This professional liability insurance protects your practice from legal consequences if a patient files a lawsuit against you. Costs for malpractice insurance will vary depending on where you live, your practice’s specialty, and your number of patients—so be sure to provide your insurer with this information from the start.  
• Business overhead insurance. If you’re unable to run your practice for a given amount of time, business overhead insurance will help you cover operating costs, such as rent, salaries, utilities, taxes, and other related expenses. 
• Property insurance. You’ll likely invest in medical supplies, computer or electronic equipment, and furniture for your practice—make sure that investment is protected by purchasing property insurance. Depending on the policy you choose, it will protect your property (and the stability of your practice) in the event of a natural disaster, accident, or theft. 
• Workers’ compensation. This coverage helps compensate employees who are injured or disabled as a result of their job, and typically includes medical expenses, lost wages, rehabilitation, and costs related to accidental health. Laws, regulations, and exemptions for workers’ compensation vary by state, so be sure to do your research! You can also review this page from the Department of Labor for more information. 

Design your practice