Demystifying Private Practice - Technical
I enjoy having my own business. Truth be told I absolutely love being self employed. I love being able to make changes as needed. Seeing something that needs to be tweaked or modified and taking immediate action. Not having to go through endless red tape and meetings just to make a simple change (yes, I spent many years working for the government). I love the thrill, that little (sometimes big) rush that comes from knowing you are responsible for everything. The buck stops with me. As I’m typing I realise that’s not entirely accurate, at least not currently. There are technically three of us in charge … and I’ve been on maternity leave since the start of the year… and I was off for half of 2017 with severe morning sickness … and haven’t worked full time since late 2015. Maybe I’m not as in charge as I thought. I also really enjoy the team aspect of Tardis. My husband Stefan started the business, I joined it a few years later, then Tim joined a few years after me. We are fortunate that the three of us work great together. We have very different work styles and approaches, but it seems to work well. And bigger picture stuff we are pretty much in synch.
Even though I enjoy it, reality is not all aspects of business are fun. In fact, many aspects of business are far from fun. When I started my Psychology practice it was far from fun. I enjoyed running a business but was quite out of my depth. There was so much I didn’t know. I shouldn’t admit this but most of it was the finance stuff. Stefan had been working in finance industry for close to a decade and by default over the years I’d left more and more of the financial stuff in his hands. I was pretty clueless when I started. Thankfully I am relativity financially savvy these days thanks to lots of hours of study, on the job training and a great mentor (a very patient hubby).
There are lots of tips I could offer from my experience running private practices; a few of the top take homes on the technical side are:
– Register for GST. By registering, you will get 10% of all of your expenses back.
– Determine what financial structure is best to operate through. This very much depends on your personal circumstances. Generally, it is simpler and cleaner to commence operating individually. Service trusts, companies and more complicated arrangements can be developed at a later date if or when needed.
– You need insurance. This is a must for medical professionals. In addition to professional indemnity insurance, you must have insurance on your business expenses, business premises and personal income. Not negotiable.
– Private practice means no compulsory superannuation. Regardless of your income, you need to have a plan in place for funding your future.