20 Reasons Every Resident Should Form A Micro-Corporation

A similar post was published by Tod Stillson MD on KevinMD 11-2-23

Employed Faculty Produce Employed Attendings

In training environments, it is common for trainers to shape the mindset of their trainees. For residency faculty, this means that they are likely to produce employed physicians who share a similar marketplace mindset. This phenomenon is backed by the principles of behavioral science. As a result, you may find yourself being guided towards traditional employment without being presented with alternative options for your professional journey.

Physician recruiters play a significant role in shaping the mindset of new graduates. They emphasize the job opportunities available and paint a picture of the "real world." However, it's important to consider that these recruiters may have biases towards employers who pay them. When you see that over 90% of offers are for employed positions, it's natural to assume this is the norm. It becomes challenging to imagine that both mentors and the market could be wrong. As a result, more than 80% of graduating residents opt for employment opportunities in some capacity.

I fully comprehend and endorse the transition towards secure employment in the healthcare industry. It is evident that traditional private practice is becoming less prevalent, making healthcare employment the prevailing job structure for the majority of individuals.

As an employee, you will play a crucial role as a technician fulfilling the transactional mandates of your large corporate employer. Your professional services will contribute to their efforts in controlling and managing the masses.

The Majority Are Wrong

Could it be possible that the majority of doctors are mistaken in their choice of traditional employment and their passive reinforcement of the corporatization of healthcare? How is it that the most intelligent group of individuals on Earth can be influenced to believe that being confined to traditional employment is in their best interest, especially when the burnout rate is reaching almost 60%?

This herd mentality, and it’s associated insane thinking, has got to stop!

Preserve Control Through A Micro-Corporation

It's time for you to regain control over your professional life, and this journey should start during your residency as you prepare to enter the marketplace.

By empowering young doctors to preserve their hard-earned professional autonomy at the onset of their career through a micro-corporation, they will no longer be forced to enter the marketplace passively as highly vulnerable individuals.

As an individual employee of a large corporation, your hard-earned professional autonomy is at risk due to the need to navigate a system that does not prioritize your individual needs and goals.

By creating a micro-corporation specifically tailored to your needs as a young doctor, you can access the tools and resources necessary to take control of your career right from the start. This innovative approach allows you to actively participate in shaping your professional trajectory, rather than being passive participants in a system that may not align with your values or aspirations.

Through the micro-corporation model, young doctors can collaborate with like-minded peers, pooling their knowledge and expertise. This model, in connection with a supportive community like the one we provide through SimpliMD, enables doctors to work together and leverage their collective skills. Young doctors simply need a trusted source that can inform, inspire, and support them in developing micro-business competency. This, in turn, will empower them to thrive in their roles as both healers and entrepreneurs.

Furthermore, this model allows young doctors to acquire valuable business skills and experience at an early stage in their careers. It empowers them to actively participate in decision-making processes that directly influence their professional lives. This newfound autonomy empowers healthcare professionals to navigate the complexities of the industry with confidence and resilience. By embracing this approach, we can transform how young doctors enter the marketplace. No longer will they be passive participants at the mercy of an uncertain system. Instead, they will emerge as proactive agents of change who are equipped to shape their own destinies while delivering high-quality care to patients.

20 Reasons Every Doctor Should Form A Micro-Corporation During Residency

To wrap up, let me provide you with 20 reasons every doctor should start a micro-corporation during residency:

1. You have earned the power to do this when you obtain your medical license, which makes you special. The right to form a micro-corporation is limited to a small group of professionals, including lawyers, entertainers, engineers, dentists, accountants, and doctors.

2. It preserves your professional autonomy, which is the best preventative measure against burnout within a broken physician labor system. It is alarming that over half of you are experiencing burnout, but by maintaining your autonomy, you can better protect yourself from its detrimental effects. Preserving your professional autonomy is so important, I wrote an entire book talking about this, and you can check it out here.

3. It improves your financial well-being. Self-employed doctors earn nearly 10% more annually than their traditionally employed peers. By implementing small business strategies, they can retain an additional 10-15% of those earnings.

4. Business-to-business contracts offer better preservation of your professional autonomy compared to individual-to-business contracts (W-2). W-2 employment can result in a loss of control over your professional life.

5. A micro-corporation can assist you with your education loan payback program by reducing your AGI. In most loan payback programs, a lower AGI leads to a lower calculation of discretionary income. Check out my post on how this works here.

6. Job stacking, which involves a combination of W-2 and 1099 jobs that lead to a preferred quality of life, is considered the future of medical careers. In this structure, a micro-corporation serves as the ideal support system. With 50% of doctors working multiple jobs, this has become the new normal. A micro-corporation offers diversified contracting options, allowing you to pursue both individual and business contracts for various jobs. You can learn more this progressive work strategy called Job Stacking here.

7. Physician labor change is needed because the status quo is broken. You are more than just a commodity. An individual micro-corporation empowers you to define and control your entry into the marketplace as an individual or micro-business. Instead of passively allowing the marketplace to force you into their mold, you can take charge of your own path.

8. You are quick learners and teachable individuals. While your medical training may not include business or personal financial education, you can easily acquire the practical skills needed to succeed personally and professionally. You don't need an MBA for this; all you need is a trusted self-service business competency source exclusively created for doctors-like SimpliMD

9. Residency is a crucial time for building the best foundation of your career. It is much easier to construct it with optimal assets, including a micro-corporation, right from the beginning, rather than attempting to deconstruct and rebuild it later in your career.

10. It allows you to slowly scale your business skills and knowledge with operation and management of your micro-corporation through your moonlighting income. This will instill confidence as you manage the larger income associated with being an attending physician. Check out a fellow resident’s post on the journey of starting a micro-corporation during residency here.

11. A micro-corporation offers more options to lower your AGI as an independent contractor compared to being a traditional W-2 employee. The result is that you can keep more of your income. While your large income as an attending may make this point seem insignificant, I must admit that my unawareness of this cost me a million dollars in the first half of my career.

12. You have the flexibility to outsource the operation and management of your micro-corporation to a team of accounting, business, and legal professionals, or you can choose to handle it all yourself. Either way, you remain in control of how your professional life is managed. Check out my SimpliMD professional network options here.

13. A micro-business structure allows you to FIRE faster, grow your net worth more quickly, and easily diversify your income channels.

14. A micro-business only requires you to manage one person: yourself!

15. Starting your micro-corporation is an inexpensive professional capstone step. The $4-5000 investment serves as the icing on the cake after the substantial costs you have incurred over the past 10+ years to become a medical professional. Although the cost may seem significant during residency, it is actually a minuscule final step compared to the nearly $500,000 it has taken to reach this point. Every physician should pursue this, whether they plan to enter the marketplace as an employee or not. The importance of asset creation associated with your medical license is often overlooked due to the belief that it is no longer necessary. However, the system has led you astray in this regard. Invite you to start build your capstone with SimpliMD here.

16. Micro-incorporation does not equate to private practice, although it is often mistakenly associated with this declining medical business model. Micro-corporations are entirely different from private practices in that they don't have the overhead of employees, buildings, medical equipment, or third-party mash-ups. You are essentially a virtual business with the ability to offer your professional services for any job. Your lack of knowledge about the medical business only strengthens the narrative perpetuated by large corporations, discouraging you from starting a micro-business and further enabling their control over and commodification of you as an employee.

17. Your own micro-corporation enables you to develop your personal brand and influence. While the practice of medicine in every specialty follows a standardized approach, the artful application of it to patients is unique to you and your own style. You will enjoy medicine more when you are not forced to conform generically to a large corporate brand.

18. Your own micro-corporation offers portability and is not dependent on location. This means that you can now change employers or positions more easily while still maintaining control over your influence. In the past, influence was limited by geography. However, in today's world, professional services and influence are increasingly independent of location. Check out my KevinMD post on this here.

19. Starting a micro-corporation sends a clear message to the marketplace. It conveys that you intend to enter the market as a micro-business rather than as an individual. This will inform recruiters and potential employers that you prefer to be considered as a contractor for your professional services rather than an employee. Due to the growing physician shortage, young doctors are receiving an overwhelming number of job offers, with some receiving over 100 offers during their training. I strongly encourage you to proactively enter the market on your own terms, rather than on their terms. Check out my KevinMD article about every doctor starting a micro-corporation here.

20. Every job or marketplace structure that allows you to practice medicine can be connected to your professional micro-corporation. For example, a parallel alternative to the traditional employment model for physicians is the "employment lite" option through your micro-corporation. It is important to be aware that you have options beyond entering the marketplace as an individual, and being empowered with this knowledge can make a significant difference.

     

Do It Now As A Building Block

Recently, I had a conversation with a married couple who are currently in a family medicine residency. I was captivated by how they eloquently described the concept of starting of entering the marketplace, as they began fully to comprehend the benefits a micro-corporation would bring to them.

She said, "It's like buying the land on which you plan to build your dream house."

I loved that analogy because just like building a house requires money for the land, starting your own micro-corporation also comes with some costs. Additionally, there are minor maintenance expenses associated with taking care of the land. However, once the land is purchased, you can then focus on the exciting part of using it to create your ideal future. After all, you can't build a house without first having the land.

Many young doctors are choosing to build their dream houses on the land owned by their corporate employers, rather than on the land owned by their own micro-corporation. Your micro-corporation is the building block that you should want to build upon because it is yours and yours alone. You have full control over it, and you, along with your loved ones, get to decide what to create with it. Ultimately, autonomy is one of the most crucial elements that will help prevent burnout and enable you to thrive.

I suggest that residents and fellows consider creating a micro-corporation before they graduate, which can be done for less than the cost of a vacation. By using your moonlighting money to fund the startup, you can potentially even funnel the earnings through your professional corporations if the numbers align in your favor.

If you are resident or fellow, I encourage you to go here to begin the process today!

If are an attending physician, and recognize you should have done this, don’t worry it’s not too late! Go here to begin the process with SimpliMD.

If you know a resident or fellow, please send them this post, or a link to download my free e-book “20 Reasons Every Doctor Should Form A PC During Residency”

Tod