Many physicians are free-lancers and/or independent contractors. Usually this is the case for locum tenens physicians. From a business perspective one can be out there alone, unsure of how to handle questions that arise. Fortunately, there is assistance that is of great benefit and affordable. It's from Back Of The House (BOTH), and they are prepared to set you up with your own virtual business as you travel around doing locum tenens or practicing independently in the community you live in. Below is an interview with the CEO of Back Of The House, Erik Vonk, as he explains their process and system.
"Today’s reality…just makes it more logical to attach support functions like health and retirement to an individual and not to a place of work."
Back Of The House provides support services for self-employed professionals, free-lancers and independent contractors. This includes bookkeeping, tax services, financial reporting, health insurance, retirement options and more. BOTH handles all of the administrative hassles that consume the valuable time of independent professionals, allowing them to focus on what they do best. BOTH simply and cost-effectively transforms self-employment into a professionally configured "Company of One" by setting up and/or maintaining an LLC for each client, assigning a Personal Business Advisor, establishing, hosting and supporting an individual I.T. infrastructure, the Personal Virtual Office and beyond.
Erik: Right! BOTH is indeed a "business in a box‟! Back Of The House is a 1 stop, turnkey pathway to an exciting and rewarding future as an autonomous, professionally configured and fully supported Company of One. Whether you currently work as a consultant, a freelancer, or on a 1099 basis, (self) incorporation offers a host of advantages and benefits. However, the perceived burdens of business ownership and fear of the unknown are either seen as ob-stacles or lead to unnecessary mistakes by many independent professionals.
Years ago, when I ran Randstad Staffing Services, there was a growing cadre of Freelancers, who told me that Randstad had replaced "Job Security‟ by "Income Security‟ for them. That was a fantastic compliment! "But‟, they said, "can't you put all the support you provide as our temporary employer, in a "rucksack", so that our lives aren't interrupted every time when we move from project to project?‟. Self-incorporation was technically the answer, but that essentially moved the support burden from us to them. So, the challenge was to find a way to let someone enjoy the advantages of business ownership, but without the burdens. It wasn't until 2007, long after leaving Randstad, that the answers were found. That's when the "Company of One‟ concept was developed – a completely unburdened and fully resourced solo business with Fortune 500 support.
MO: Obviously most entrpreneurs are not professionals in areas of HR, taxes, Business Structures, Health Benefits and the other areas you support. How much time and money do you estimate the average solo professional specnds trying to get his or her arms around these things when they should be focusing on delivering for their customers?
Erik: We estimate that on average 12 to 15 hours per month are "sunk‟ into non-core support activities. For professionals who serve multiple clients, that number is higher. Overall, approximately 8% – 10% of valuable time that could otherwise be billed, evaporates! That is a terrible opportunity cost! Plus, while doing all this "non core‟ work, lots of money is spent on advisors – tax, legal, accounting, health, retirement, liability insurance, etc. – that don‟t know of each other what they know about you. Expensive, inefficient and risky. Our services have been designed to a) reduce or eliminate direct expenses and opportunity cost, b) improve efficiency through a single point of contact approach and c) eliminate risk by providing support AND oversight.
MO: One service among the many offered by Back Of The House is a Personal Office Manager. Explain how this works.
Erik: Our Personal Business Advisor is core to our concept. An experienced, educated (CPA, Law degree, etc.) dedicated professional is assigned to each client as a single point of contact. This pro-active, tailored 1 stop service has been designed as the antithesis of "self help‟. The Personal Business Advisor runs your back office, manages your IT support and monitors receivables, bank balances, due dates, filings, taxes, insurances, etc. No help desks or call centers to hassle with; just one number in your cell phone for any question about any aspect of your business. Personal "Chief Operating Officer‟ would be a better title.
MO: Your website, backofthehouse.com, encourages independent professionals to sign the BOTH Declaration of Independence. Just what is this declaration and what does it represent?
Erik: By signing the Declaration of IndependenTS, you join a rapidly growing pool of freelancers and independent professionals. You‟ll receive a newsletter called the "Un-Job Post". Once the community is large enough, we will offer communication and collaboration facilities, free of charge.
MO: Is there a threshold where it makes sense for a freelancer to leverage BOTH? That is, is there a minimum amount of revenue a person should be generating before considering your service?
Erik: Yes, there is, and it is fairly low. A bill rate of $20,- to $25,- per hour or annual billings of $40,000.- to $50,000. begin to justify the use our services. Our fees range from around $150,- per month for a basic support package to only around $500,- a month for our all-in, full service level. When I say "only‟, it is because the sum of the components, if bought individually, represents a market value of triple that amount. Further, the Company of One status make our fees tax deductible. The full service level is by far the most used option because it covers all the common needs of a business owner, including billing, collections, bookkeeping, banking, a hosted IT environment; the Personal Virtual Office, a website, wellness benefits and the Personal Business Advisor.
The only expenses not included in this amount are premiums for individually underwritten health & retirement plans and liability insurance – which are also tax deducti-ble, by the way.
The Personal Virtual Office - our hosted IT environment -is a turnkey, fully supported, cloud computing service. Clients access all their applications, files, email, calendar, contacts and collaboration tools through our Portal Desktop. Whether working at the client‟s office, a remote office, at home or on the road, all you need is Internet access. PC, Mac, Blackberry, iPhone it doesn‟t matter, the PVO is hardware, OS and browser agnostic. Work from anywhere - at anytime- on any device. This is a uniqie composite of Software as a Service (SaaS) and genuine, personal support.
With BOTH you can be in business for yourself, not by yourself.
MO: You have an impressive history with your time and accomplishments at Randstad and Gevity, not to mention authoring a book, "Don't Get a Job, Get a Life!" What has been the most important lesson you have learned in business?
Erik: Thank you! The most important lesson is that work needs a new platform. An employment contract is no longer an efficient instrument to connect people with work. Today's reality is that the dynamism in the employment market just makes it more logical to attach support facilities like health and retirement to an individual and not to a place of work. That is what is now accomplished through Back Of the House: being employer and employee at the same time. As your own employer you provide yourself with benefits, retirement plans, protection and support. Perhaps we should call that the employou instead of employee! And, your legal status as a Company allows you to sell your talent or services as a Vendor, not as a Worker. As a Vendor you are subjected to different, more attractive legal and tax regimes than as a worker. The lesson is that work needs a new platform and it is very gratifying to be providing the solution!
Erik Vonk is Founder & CEO of Back Of The House. He is an internationally recognized thought leader and expert in the field of flexible work arrangements, contingent workforce strategies and HR outsourcing. Erik has profitably grown the operations of Randstad Staffing Services in North America from a green field start to reach $1.5 billion in 8 years. As Chairman & CEO of Gevity HR, he has strategically repositioned the company from a traditional PEO insurance arbitrage business to a recurring fee based HR outsourcing market leader, substantially increasing revenues and profitability in the process.
From www.MO.com/erik-vonk Interview January, 2011
For more information: 941.328.8708 | bridgette@BackoftheHouse.com | www.BackOf TheHouse.com
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Back Of The House (BOTH) provides Freelancer Total Support ™ including self incorporation, health & retirement benefits and 1 stop back office services.