Q:

Dr. M

I have a question for you. I am hearing divided advice about what I 
should do about an offer I got for an independent contractor position 
and I wanted to hear what you had to say about the deal I was 
offered. I have friends that say they are getting a 60/40 split as an 
independent contractor with them making 60% and giving the Doctor 
they are working with 40%. Others say they are receiving a 50/50 
percentage split. Both say they are not paying any additional rent. So 
the split is all they are doing and getting access to the entire office 
and x-ray equipment, etc. 

I was offered a deal where I get 40% and the Doctor gets 60% and 
says it is because he doesn't know me and that he is willing in the 
future to renegotiate to a 50/50 split, but that he feels he should be 
making a profit for someone coming in his office. He also does not 
have an x-ray machine in his office and I will be using my own 
chiropractic table I am bringing to the office and he is putting me in 
a room of my own and I am planning to do my own financial books, 
my own appointments and have my own business license with my 
own business name and my own tax I.D. number so that I can set up 
my own business account and my own phone line in his office or just 
use my cell phone until I get a business line. 

Am I being taken advantage of. Part of me believes I am and that I 
have tried to explain to him that I would be having my own internal 
expenses by paying for my business cards and my advertising and my 
supplies. What do I do, he doesn't seem to think he is being unfair and 
says he is offering me a great deal and that I am able to use his 
office, the computer, or the appointment book and his receptionist if 
I want to. For 60/40 with me only getting 40%, he will believe I will 
want to get my money's worth, but that will allow him to manipulate 
what I am doing. I don't want to share his books or his computer. 
And, I will not need his receptionist at first. Should I be looking 
elsewhere? Or can I make this work, I ask because I don't think I can 
survive on 40% with outside business expenses and personal 
expenses to live.  What is your input and how would you present it to 
him. What is fair?

A:

Thanks for the e-mail. First accept the fact that an IC rents a space 
and runs their office independently of the owner .. this would be the 
ideal situation .. just like renting space if you are on your own. An 
associate works for a DC and is paid a salary. Okay .. if you will be 
using his space only .. which is what it seems to me .. then just pay 
him a set rental fee and be done with it .. Say $1200 a month with no 
percentage at all. He seems to feel that he is taking a risk .. well 
how so? There is no investment on his part other than having another 
DC share his space. A percentage arrangement is typical but there is 
more offered by the owner than what seems to be with your 
situation. Make it clear and clean with just a rental fee. If he insists 
on a percentage than offer him a 10-15% of collections (not 
services) after you collect $8-10,000 (including your rental fee) but 
place a cap on this at 20,000. 

Next .. I would never advise a DC to work without an x-ray machine. 
The fact that there is none in this office .. you will be using your 
own equipment .. have your own telephone number and actually 
operate truly independently proves again that you just offer a rental 
fee per month and that¼s it. There is no risk for this DC owner .. you 
work independently and just pay rent .. probably helps his bottom 
line as well. 

I would advise you to walk away from this opportunity unless a flat 
monthly rental fee is secured. If a percentage is still a factor .. be 
sure to have a timeline .. if 50/50 is sometime in the future .. then 
when and after what criteria? 

It seems you can probably look around town for a rental space and 
open on your own. If you have the table and with proper planning and 
guidance you can start correctly with even your own IC helping you 
pay rent for awhile. 

Have a Great Day

Dr. M