Wednesday, February 22, 2023
Many physicians engage in side activities to supplement their income. These side gigs can range from taking surveys for pharmaceutical companies to providing consulting services in areas where they have expertise. Despite the extra income, physicians often don't consider their side gigs as actual businesses and fail to keep track of their expenses, revenue, and time investment.
There are a number of steps to turn a side gig into a formal business. These include filing business formation documents with your state, obtaining an Employer Identification Number from the IRS, opening a business bank account, and setting up a bookkeeping and accounting system. Whether or not it makes sense to do this depends on several factors, including the amount of income you’re earning with your side gig, the type of work you’re doing, and your plans for the future.
However, nothing should hold you back from thinking about your side work from a business perspective. Even if you don’t take the actions of a full-fledged business, considering your side work in this way can have a number of benefits without having the expansive responsibilities of a business owner.
By treating their side project as a business, physicians can gain a clearer understanding of their revenue and expenses, which can help them make informed decisions about scaling their operations. Using the same level of professionalism and discipline that you would as a business owner will help you set clear goals, keep good records, anticipate future work and opportunities, and spend your limited time wisely.
Let’s take a look at eight key business components and how you can use them to take your side gig to the next level.
If you're hoping to turn your side gig into a thriving business, it's all about getting into the right headspace. And that means thinking about things strategically. You'll need to set some objectives, figure out what your vision for the future looks like, identify areas for growth, and be on the lookout for potential threats. This isn't just a hobby, it is the use of your hard-earned knowledge and skills as a physician to earn some extra income. And that means being proactive, making intentional decisions, and taking a long-term view of things. To really make it work, you'll want to study the competition (how much are your colleagues charging per hour for consulting?), keep an eye on what your customers are after (where is your medical expertise needed?), and keep track of what's happening in your market. Regularly reassessing your strategy will make sure you're staying on track, too. By approaching your side gig with a strategic mindset, you'll increase your chances of making it a real success story.
Depending on the type of side hustle work you’re doing, there can be a labyrinth of legal red tape to cut through. This varies by state and by the extent to which you’re utilizing your medical degree or getting involved in the care of individual patients. Where do you begin? First, you'll want to figure out what type of business structure is best for you - an LLC, a sole proprietorship, or something else entirely. This is a crucial step, as it helps protect your personal assets and shield you from any legal kerfuffles. Next, consider if it makes sense for you to get an Employer Identification Number (EIN) from the IRS - this is your key to filing taxes and other official documents if you take the route of formalizing your business. And don't forget insurance! You'll want to protect your budding business from any financial mishaps with coverage like general liability and business property insurance. You may want to consult with business attorney or tax expert to give you even more guidance. Even if you don’t need much advise from them now, having an established relationship with these experts can make things easier down the road if you find yourself needing their services.
Imagine running a one-person side gig with the same level of precision and efficiency as a successful corporation. Could this help you to boost your earnings and reach your personal and professional goals? Here’s how it might. By bringing a sharp focus to the operational aspects of your side work, you’ll keep an eye on efficiency, scalability, and profitability. For instance, you could introduce a couple standard operating procedures. These don’t need to be long and cumbersome; rather, they simply put into writing the way you intend to conduct your side gig work. You can also measure your performance. Take one day each month or each quarter to look at how much you earned, how many clients you interacted with, or how many proposals you sent out. Or review any other metrics that are meaningful to you and the work that you’re doing. Use this information to continuously seek ways to improve and streamline the inner workings of your hustle. Moreover, by identifying the tasks that are most crucial to driving revenue and meeting business goals, you can keep your efforts and resources pointed in the right direction.
Human resources isn’t just for big corporations. Even if you're flying solo, it pays to take a closer look at your own skills and tendencies. By mapping out your strengths and weaknesses and making sure your tasks align with your passions, you set the stage for side gig satisfaction and a renewed motivation to succeed. If you have more work than you can handle, rather than turn it down, consider if you could take some of the load off by hiring a virtual assistant or even taking on a physician partner. Perhaps you’ve had to pass on an opportunity or two because you don’t have the necessary skills or expertise. Consider if additional training, such as a CME course, could help you take your side gig to the next level. (And then write off the cost as a business expense!) And let's not forget about performance management. Tracking your progress and giving yourself regular feedback will help you get more work and do better quality work.
Higher income. That’s the number one reason why physicians have side gigs on top of their already hectic work schedules. When it comes to your side hustle, money matters. And in order to make sure your cash is flowing in the right direction, financial management is key. Keeping tabs on all the income and expenses that come with running your gig is crucial. This way, you'll always have a clear picture of your financial situation. And that's important when it comes to making decisions about pricing your services, investing in marketing or business resources, and expanding or growing your gig. And then there’s taxes - it's crucial to classify and report all income and expenses correctly to avoid any penalties or fines. A corporation doesn’t wait until April to look at their finances from the past year, and neither should you. A little knowledge about tax laws or a quick chat with a tax pro can help ensure compliance and minimize any potential tax liability.
"Selling yourself" is the name of the game for a solo physician biz owner or freelancer. And that's where the sales department comes in - even if the department consists of only you. First off, know your target client or customer. Craft a marketing plan that'll catch their eye. Don't be afraid to network and lean on existing connections. Communication is key too - stay in touch with current clients to make sure their needs are being met, and always be on the lookout for ways to improve. Too many physician looking to boost their income wait for the opportunities to come to them. You need to seek them out. By embracing a sales-driven mentality and putting the right strategies in place, a one-person show can bring in the work that will bring your side gig income to the next level.
Research & Development
In the realm of one-physician gigs, research and development reigns supreme. Whether it's staying on top of the latest trends in your field, immersing yourself in industry events and literature, or networking with experts and peers, R&D is essential for providing top-notch services. This can be as basic as keeping tabs on the literature or developments in your subspecialty. Or keeping a running list of all the business ideas you have – regardless of how pie-in-the-sky they are. And don't forget the power of reflection! Keeping a record of past projects and their challenges can provide valuable insights for future endeavors. By continuously engaging in R&D, solo consultants can remain ahead of the curve and cater to ever-evolving client needs.
Customer service is key to landing new clients and keeping repeat customers – even as a medical doctor. To be successful in your side gig, it's important to understand your clients and offer top-notch services that meet their needs. Ask yourself: why are they hiring a physician? What challenge are they facing and how can your work address that? Doctors aren’t known for being the most reachable and responsive bunch. But, as much as possible, be reachable and responsive with your clients and potential clients. Quick responses to inquiries and providing concise information can earn clients' trust and credibility. Delivering on your promises, addressing issues efficiently, and ensuring satisfaction will keep them coming back for more. By prioritizing a customer-first mentality and consistently delivering excellent service, you can establish a strong reputation and grow gig through word of mouth and referrals.
Thinking of your side gig as an actual business is important in order to find more work, earn more income, and ultimately reach your goals as a busy physician. Take a thorough look at any ways in which you’re earning income outside of your day job, and consider if you can adopt a business-oriented approach that will better assist you in reaching your financial goals.
Sylvie Stacy, MD, MPH
Physician Specialist in Addiction Medicine