Saturday, October 11, 2003

Playing By the Rules

I received the lease agreement 2 days ago, and will be reviewing it over the next few days. Since I felt confident that I will rent this office space, I filed an official DBA (Doing Business As AKA Fictitious Business Name) yesterday at the county recorder's office. I will be practicing as (drum roll) . . .

South Pasadena Family Practice Medical Office.

Rather unexciting, but gets the message across that I am in my target community and that they won't have to travel far to reach me.

It cost $10 and they gave me a form that I need to take to a local newspaper in order to publish a DBA notice that has to run once a week for 4 weeks. Our small weekly local newspaper does this service, and I get the feeling it derives a substantial amount of income from them. At any one time, it seems, there are at least 10-15 of these DBA notices published in the classified ad section, more than the actual classified ads.

They also gave me an official DBA form that I can take to a bank to open a business account (using my new business name). Unfortunately, I have nothing to fund this business bank account with yet (except my own money). My startup costs are modest, estimated to be $10,000 to $15,000-ish. I'm not getting any fancy equipment, just the basics. My electronic medical record software will hopefully be inexpensive, as I've mentioned before.

Because we are risk-averse people, my wife and I agreed that I would not use our house as collateral for any business loan. As a result, I have been unable to find any bank willing to make me a startup loan.

OK, I didn't personally go to a bunch of banks and beg, "Give me money, PLEASE!" No, I'm smart. I had someone do it for me. And not just anyone. The person who put together my business plan put me in touch with a loan executive at a major bank. After I described my business concept to him (solo doc, low overhead, high touch, hi tech), he seemed to think it was a winner and said he would call around for me and see who could help with a loan. He did mention that $10,000 was kind of "small change" for the kind of clients he usually dealt with, but he would make an exception in my case.

A few days later, he called me back to say that NOBODY was willing to make that kind of loan at this time. Even people who owed him favors. Ouch. The economy must still be really bad.

I've heard about some loan companies that are willing and able to lend doctors money, but I suspect they do so by charging a high interest rate. Rather than do that, I've decided to invest in myself, and borrow from my 401k plan. I am allowed to borrow up to $50,000 and even after I resign from my current position, I can continue to pay back the loan, rather than count it as a disbursement. I would have to charge myself 5% interest (prime + 1%), but that's a much better deal than taking out a cash advance from a credit card and paying 19% interest. The downside is I would then be making only 5% interest on that part of my 401k investment.

All this business-type stuff has been completely foreign to me. At Kaiser, we physicians are shielded from most of this. I feel like I'm learning a new language. I certainly didn't get this kind of training in medical school or residency. This is a subject matter that we could learn from other practitioners, like chiropractors.

As a child, there were many things that I could be when I grew up. I definitely remember that I absolutely did not want to go into BUSINESS. But as I learned more about the practice of medicine, I realized that Medicine Is A Business (TM). And that good medical care involved knowing how to play by the rules. That is why I'm now willing to go into business for myself.

I want to make some of my own rules.

Countdown: 86 days until target start date.