Empowering Physician Entrepreneurs: Micro-Corporations as Catalysts for Doctors' Side Jobs

Side Jobs Are Common

In the evolving landscape of healthcare, a remarkable trend has emerged—39% of doctors are embracing side jobs to complement their primary medical practices. Nearly 40% percent of physicians have a side gig in addition to their full-time medical roles, according to Medscape's 2023 "Physician Side Gigs Report," Physicians earn an average of $34,000 in extra income annually from various side gigs.

The types of side jobs both inside and outside the medical field are diverse which in turn reflects the unique individuation of every doctor. As I speak to doctors all over the country, I see more and more are layering in side jobs to their primary job. I call this job stacking and I have a nice e-book explaining job stacking here if you want to check it out.

This surge in entrepreneurial spirit reflects a desire among physicians to diversify their income streams and explore opportunities beyond traditional clinical settings. In this post, I’ll delve into how micro-corporations can serve as a strategic solution to enhance and streamline these entrepreneurial pursuits.

The Surge of Physician Side Jobs: A Paradigm Shift

Physicians are increasingly embracing side jobs for various reasons, signaling a paradigm shift in the medical profession. The traditional model of exclusive clinical practice is expanding to include entrepreneurial ventures and job stacking, driven by multiple factors such as:

1. Financial Diversification: The volatile nature of the healthcare industry and uncertainties surrounding reimbursement rates have led many of you to seek additional income sources. Side jobs, whether in consulting, teaching, or other ventures, provide financial diversification and resilience.

2. Passion Projects and Specializations: Many of you have unique skills and passions outside their primary medical roles. Engaging in side jobs allows you to explore these interests, whether it's medical writing, research, or starting a healthcare-related business.

3. Work-Life Balance: Side jobs offer a potential avenue for achieving a better work-life balance. You can tailor their side gigs to align with your personal interests, enabling you to find fulfillment beyond your clinical responsibilities.

4. Professional Growth and Networking: Entrepreneurial ventures provide opportunities for professional growth and networking. Engaging in side jobs often leads to collaboration with professionals from diverse fields, fostering innovation and expanding your professional circles.

    

Enter Micro-Corporations: Tailored Solutions for Physician Entrepreneurs

Micro-corporations, or micro-businesses, represent a compelling solution to the challenges faced by your entrepreneurial ambitions These small-scale corporate entities offer several advantages that align seamlessly with the needs and aspirations of those of you engaging in side jobs:

1. Legal Structure and Liability Protection: Micro-corporations provide a formal legal structure, offering liability protection for you. This separation between personal and business assets shields your from personal liability related to their entrepreneurial activities. This is one of most significant and important reasons you should create a micro-corporation for your side hustles, rather than receive it as sole proprietor.

2. Tax Benefits and Deductions: Establishing a micro-corporation opens doors to various tax benefits and deductions. You can optimize your tax situation by deducting business-related expenses, potentially reducing your overall tax liability. For a blog post breaking down a case study of 3 doctor’s side income, and how a micro-corp owner could pay no taxes on their income—check this out.

3. Flexibility in Management: Micro-corporations offer flexibility in management and decision-making. You can tailor the structure of your micro-business to align with the specific needs and goals of your side jobs.

4. Regulatory Compliance Assistance: Micro-corporations can benefit from simplified regulatory requirements compared to larger corporate structures. This can ease the burden of regulatory compliance for you as an entrepreneurs, allowing you to focus on your core professional responsibilities.

5. Financial Planning and Budgeting: With a formal business structure, you can implement robust financial planning and budgeting strategies for your side jobs. This includes managing revenues, personalizing their fringe benefit plans, and enlarging their retirement plan options.

6. Professional Image and Branding: Establishing a micro-corporation contributes to a professional image and branding for physician entrepreneurs. It enhances credibility, instills confidence in clients and collaborators, and facilitates networking opportunities within and beyond the healthcare industry.

7. Risk Mitigation: Micro-corporations assist in risk mitigation by providing a legal buffer between personal and business affairs. This can be particularly crucial for you if you engage in entrepreneurial activities that carry inherent risks.

Establishing Your Micro-Corporation

Establishing your micro-corporation as a doctor can be an exciting and rewarding endeavor. As a medical professional, you have already demonstrated your expertise and dedication to helping others. Now, it's time to take the next step and create your own micro-corporation.

One of the first considerations when establishing your micro-corporation is deciding on the legal structure that best suits your needs. This could be a sole proprietorship, partnership, limited liability company (LLC), or even a professional corporation (PC). Each option has its own advantages and considerations, so it's important to consult with a legal professional who specializes in healthcare law to determine which structure is most suitable for you.

The next step involves choosing your preferred tax classification for your micro-business

Another step to consider is your personalized fringe benefit plan. Different business entities and tax classifications have unique rules and regulations associated with them. Therefore, it is important to seek the guidance of a knowledgeable professional to navigate through this process.

Establishing your micro-corporation as a doctor requires careful planning and consideration of various factors specific to the healthcare industry. By taking these steps thoughtfully and seeking expert advice when needed, you can lay the foundation for a successful medical practice that positively impacts patients' lives while fulfilling your professional aspirations.

If you are a doctor who is working side jobs then please reach out to me for an inexpensive business consultation to discuss whether a micro-corporation would be beneficial to you from a liability, tax planning, and professional development perspective.

If you are already a micro-corporation, I invite you to become a member of SimpliMD to go deeper and further in your small business competency skills.

Tod