8 Reasons Why Doctors Should Consider Owning a Business

I previously published an article titled 8 Reasons Why Doctors Make Great Entrepreneurs.  I really enjoyed exploring the nuances that make physicians, dentists, pharmacists, and other healthcare professions also great entrepreneurs.  However, that article did not completely address the bigger picture about why business ownership is important, the assets it provides and more.  Since the creation of The Motivated M.D., I have worked tirelessly to transition my love of personal finance and writing into something valuable.  As the website has grown, so too has my passion for small business ownership.  While running a business may seem like a daunting task on top of your day job, there are many compelling reasons why doctors should consider owning a business.  In this post, we explore reasons why doctors should think about venturing into entrepreneurship. Here are the 8 reasons why doctors should consider owning a business!

1. Diversification of your income streams

As a practicing healthcare provider, your income is primarily generated from your clinical practice.  However, owning a business can provide an additional source of income, creating a diversification of income streams.  This can be particularly beneficial during times of economic uncertainty (like inflation…cough cough).  Owning a business allows you to have more control over your income and financial future.  It can provide a cushion during financial hardships, or expedite your ability to reach monetary goals.

For example, if you own a medical clinic, you can also offer services such as telemedicine consultations, online health courses, or health-related products, which can generate additional revenue streams.  This diversification of income can provide financial stability and reduce the risk of relying solely on your career for income.

If you wish to learn more on the importance of cultivating multiple streams of revenue, then look no further!  I previously wrote a post called The Importance of Multiple Streams of Income.  Here you can find a more in-depth explanation as to why diversification of your income is important.

2. Increased financial opportunities

Owning and operating a business can create new financial opportunities that may not be available solely through your career.  For instance, by owning a business, you have the potential to build equity and create value in the form of assets such as real estate, intellectual property, or a profitable business model.  This can result in increased income generation and financial security over time.  Furthermore, owning a business can provide you with tax advantages and deductions that may not be available to you through your healthcare profession, which can help optimize your financial situation.  

Let’s talk a bit more about the tax advantages for a moment.  Being a business owner offers some tax advantages.  Here is an example, you may be able to deduct business expenses such as office rent, equipment purchases, and marketing expenses, which can help optimize your financial situation and reduce your tax burden.

Further, owning a business can provide you with opportunities for wealth accumulation and retirement planning.  By investing in your business and building its value over time, you can create a valuable asset that can be sold or passed on to future generations.  This can contribute to your long-term financial goals and provide you with a legacy to leave behind.  More on that later…

3. Asset protection and risk management

Physicians are frequently exposed to various risks and liabilities in their medical career, including malpractice lawsuits, employee claims, etc.  Owning a business can provide you with an additional layer of asset protection and risk management.

Legal protection

By structuring your business as a separate legal entity, such as a corporation or a limited liability corporation (LLC), you can shield your personal assets from potential business liabilities.  This means that if your business faces a lawsuit or incurs debts, your personal assets, such as retirement savings or other investments may be protected from being seized to satisfy those liabilities. 

Business operations

Owning a business offers you control over business operations and allows you to implement risk management strategies.  You can purchase business insurance policies, such as greater liability insurance or professional liability insurance, to protect your business from unforeseen events.  You can also implement best practices in your business operations to minimize risks, such as implementing thorough employee training programs, maintaining proper documentation, and adhering to higher principles of your choosing. 

4. Autonomy and control

As a doctor, you may work within the confines of a hospital or healthcare system, which can limit your autonomy and control over how you choose to practice or run things.  Owning a business can provide you with the freedom to make decisions and implement your vision without having to adhere to the policies and procedures of a larger organization.  You have the flexibility to set your own schedule, choose your employees, and make strategic business decisions that align with your goals and values.  This level of autonomy and control can be empowering and fulfilling for many doctors and healthcare professionals. 

Be your own boss

As a business owner, you have the opportunity to create your own unique brand and identity in the market of your choosing.  This can differentiate you from other medical professionals or entrepreneurs.  You can develop your own marketing strategies, set your own pricing, and tailor your services to meet the specific needs of your customers.  This autonomy allows you to shape your business in a way that aligns with your professional and personal values, and provides a sense of ownership and pride in your work!

It can be incredibly freeing to finally operate how you wish to, not how others choose to dictate your time and effort.

5. Professional growth and development

Owning a business can provide doctors with opportunities for professional growth and development beyond their clinical skills as a doctor.  Running a business requires you to develop skills in areas such as management, marketing, finance, and operations, which can enhance your overall business acumen. 

These skills are transferable and can be valuable in various aspects of your career, including your medical practice.  You may also have the opportunity to expand your knowledge and expertise in a different industry or niche, which can broaden your professional horizons and provide you with a new perspective on healthcare and medicine.

6. Innovation and creativity

Owning a business allows you to be innovative and creative in your approach to solving problems and meeting the needs of those you interact with.  You have the freedom to implement new ideas, experiment with different strategies, and take calculated risks to drive your business forward.  This entrepreneurial mindset can foster a culture of innovation and creativity that can benefit both your business and your medical career.  By being a business owner, you can challenge the status quo, think outside the box, and come up with innovative solutions to the challenges you face in the healthcare industry. 

When I started The Motivated M.D. I was timid.  I was afraid my writing was amateur and offered nothing new.  However, the creative process of writing both invigorated me and helped me to hone my craft.  I was simultaneously working on my writing skills, educating myself on personal finance, and interacting with entrepreneurship in a way I have never done before.  All of these things were both educational and motivating.  I challenge everyone to consider business ownership for these reasons alone, irrespective of the income generation (which is a huge plus)!

7. Job creation and community impact

As a business owner, you could create jobs and make a positive impact on your community.  By hiring employees, you contribute to the local economy and create employment opportunities for others.  This can be particularly meaningful in underserved areas or communities where access to quality healthcare may be limited.  If your business endeavors are outside of healthcare, then this reasoning still applies!  Owning a business allows you to have a broader impact beyond your medical profession by creating job opportunities for others, supporting local vendors, and contributing to your local economic development.

The Motivated M.D. is not quite at a point financially where I am employing anyone other than myself, but as the site grows, I have every intention of hiring.  Eventually, I will need someone to manage my social media accounts.  I will need a freelance writer who knows the physician finance niche well, and someone to help manage the website.  Each of these are opportunities to both support and grow the platform while offering jobs to others.

8. Legacy and retirement planning

When it comes to financial planning, doctors often face unique challenges due to the nature of their profession.  Long hours, demanding workloads, and complex reimbursement systems can make it difficult for doctors to focus on long-term financial goals, such as retirement and legacy planning.  However, owning a business can be a strategic solution that allows doctors to address these challenges and create a solid plan for their retirement. 

It is important to not rely solely on your medical career for your retirement savings.  Yes, physicians have high incomes but owning a business can provide an additional source of income and wealth accumulation that can help you build a substantial nest egg for your retirement years…or offer you the opportunity to retire early (here’s looking at you FIRE).

Business as a legacy

A business can also be a legacy.  I recently published a post titled How to Leave a Legacy and it seems dutifully positioned here. One of the advantages of owning a business is the ability to pass it on to your family or other successors.  You can create a succession plan that outlines how your business will be managed and transferred to the next generation.  This can help ensure that your business continues to thrive even after your retirement or passing, providing financial security to your loved ones and preserving your professional legacy.

Business as philanthropy

Last, but not least, owning a business can provide you with opportunities to engage in philanthropic endeavors and support charitable causes that are important to you.  You can use this business to create a positive impact in your community by donating a portion of your profits or engaging in corporate social responsibility initiatives.  This can leave a meaningful legacy that goes beyond financial wealth and contributes to the greater good. 

Take home points

Well, there you have it. Those are the 8 reasons why doctors should consider owning a business. Owning a business can offer you many new and interesting opportunities.  From wealth accumulation, acceleration, to asset protection and legacy, there are a myriad of reasons for doctors to consider owning a business.  Don’t believe me, just ask the Financial Samurai! As I continue to learn and self-educate on the intricacies of small business ownership, I have been excited at the education it offers me, as well as the impact it has on me as a healthcare professional.  There are substantially more than 8 reasons why doctors should consider owning a business, but there were the ones that I found the most notable.  As always…

Stay motivated!

The Motivated M.D.

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