Doctors Can Revolutionize Their Career with a Micro-Business Mindset

Imagine being able to choose the terms of your work so you don’t just earn more, but keep more. Most physicians never realize they have this option, let alone consider the benefits. That’s because our profession has long pushed a narrow path: either you’re a W-2 employee, where taxes and your autonomy are largely outside your control, or you manage the entire weight of a private practice. But here’s the truth. There’s a far more flexible, empowered approach to earning as a physician that leverages tax benefits while increasing your control over your professional life. And with this option, doctors can revolutionize their career.

Let’s take a fresh look at how you can approach job opportunities with a strategic choice in mind: do you want your income to be W-2 or 1099?

This single decision—whether you work as an employee or a micro-business—can dramatically impact your financial health and professional satisfaction. If you’re tired of feeling like the system is set up to work against you, you’re not alone.

This is your opportunity to break out of the W-2 mold. You can take control of your earnings and thrive as a micro-business owner in a healthcare system that needs you, not the other way around.

So, I asked Tod Stillson, MD, founder of SimpliMD, to help me dive in and look at what it means to work for yourself—even if you’re contracted with a large organization. We will also see why the financial control and freedom doctors can gain may be the smartest career move you are yet to make.

How doctors can revolutionize their career with a micro-business mindset

New job opportunity

When you’re considering a new job opportunity, whether it’s your main position or a side gig, it’s crucial to carefully evaluate the tax implications of your earnings.

Ask yourself: Do I want this income to be W-2 or 1099?

This decision is vital because, with higher income levels, the type of income you earn significantly affects how much money remains in your household after taxes. If you’re primarily a W-2 employee, you’re likely familiar with the substantial tax burdens that arise each year. By exploring alternative income types, you can potentially reduce these burdens and keep more of your hard-earned money.

For instance, if you’re contemplating adding a $40,000 side job (like one of these physician side gigs), understanding the difference between W-2 and 1099 income can greatly impact what you ultimately retain. During my time as a traditional W-2 employee, I was unaware of these nuances and simply assumed that earning more was better without considering the impact of the type of income I was earning. It wasn’t until I transitioned to self-employment as a micro-business owner that I began to understand taxable cash flow. Once I did, it allowed me to lower my effective tax rate and retain more earnings.

Another way to consider this question is: Do I want to work as an employee or non-employee on this contract?

For more on contract negotiation as a doctor, check out these posts.

This perspective focuses on control and professional autonomy rather than just taxes. If you’ve worked as an employed attending physician before, you know all too well about large tax burdens and diminished professional autonomy leading to burnout. This is a consideration that doctors need to consider in their career.

In Tod’s experience as both a traditional employee and self-employed micro-corporation owner, pursuing 1099 income as a non-employee has been beneficial for both finances and professional well-being.

The consequences Of business illiteracy

The challenge many doctors face is a lack of awareness about their options, primarily due to limited business knowledge.

When it comes to choosing between W-2 or 1099 income, they often find themselves unprepared to decide. This stems from a conditioning that leaves them feeling disempowered, as if employers hold all the decision-making power. It’s time for doctors to break free from this cycle and realize that they do have choices. We can empower ourselves in what can seem like an unfair system.

This situation reminds me of schoolyard bullies who steal lunches while taunting “What will YOU do about it?” As children we felt powerless until adults intervened—or peers united against injustice—similarly most doctors feel powerless within our broken system today.

But I’m here now inspiring YOU towards empowerment by showing paths out from toxic paradigms!

By empowering yourself through entrepreneurship via owning micro-businesses—you reclaim agency rejecting misleading narratives otherwise suggested!

Not only restoring autonomy but positioning success amidst rapid changes happening around us daily too!

Owning a micro-business offers you significant advantages. It grants federal, state, and small business powers that effectively counteract the challenges of a dysfunctional system. It amplifies your professional influence in the marketplace. In the absence of medical unions to collectively advocate for us as individuals, our most viable strategy to combat systemic forces is to pursue individual professional empowerment through entrepreneurship. This path not only strengthens your position but also equips you with the tools needed to thrive in today’s competitive environment.

Rethinking traditional career choices for doctors

Traditionally, if a physician wasn’t in private practice, they became a W-2 employee. This long-held binary viewpoint shapes how both physicians and employers view professional relationships in healthcare.

But the times are changing, and it’s crucial that we reconsider this perspective in today’s modern economy. The decision we face in our professional journeys should not simply be between employment and private practice. Rather, it should involve choosing whether to work independently or for a marketplace corporation. Furthermore, within the realm of working for a corporation, there needs to be a deeper distinction between being an employee and a non-employee.

The truth is healthcare is largely governed by corporate interests. And if you’re one of the doctors seeking to reclaim professional control in their career, embracing the business model of self-employment or non-employee labor could be your most strategic move. Choosing between self-employment, traditional employment, or non-employee labor will significantly impact your level of professional empowerment and influence within the marketplace. By opting for a path that prioritizes autonomy, you can enhance your agency and shape your career on your own terms.

The transformative mindset shift we must embrace is the realization that you are a business in your own right

You are fully capable of generating substantial revenue through your professional services as doctors in your career. It’s about igniting that inner fire and recognizing the boundless potential within you to thrive independently and make a significant impact!

It’s time to rethink traditional models: you don’t have to manage a private practice to thrive in the business world. Operating as a micro-business doesn’t mean you have to be up against large corporations. Instead, it positions you within the thriving category of non-employee labor. Here you’re collaborating with these big companies, not competing against them. Embrace this opportunity and redefine your role in the marketplace!

As a micro-business, you have the flexibility to work for another corporation while maintaining your business identity. You can decide whether to engage in this work contractually as an employee or opt for a business-to-business arrangement as a non-employee. This choice allows you to tailor your professional relationship according to your preferences and needs.

By viewing yourself as a micro-business, you gain flexibility and choice, reshaping what it means to offer your professional services.

A business of one

The truth is, you’re a micro-business. Regardless of where your career as doctors stand now.

As a licensed professional, you have the legal power to be a solo business, and you have unique professional skills that have value in the marketplace. For employers, your professional services generate revenue and attract patients, making you a powerful income engine within any healthcare ecosystem. In a way, you’re both the “product” and the machine that drives the healthcare organization’s growth. Your work creates downstream value—generating ongoing revenue churn that reinforces the employer’s brand and business model.

But these same powers are available to you individually, whether you work within a large corporation’s ecosystem or independently. Recognizing yourself as a micro-business gives you agency to determine how you engage with the marketplace.

Agency and choice

Recognizing that your professional training and license grant you significant marketplace agency is essential. This agency empowers you to choose how best to utilize your business capabilities. Whether as an employee, non-employee, or self-employed—based on what aligns with your personal goals. Opting to work as an employee means transferring control of your revenue-generating abilities to an employer. This is a choice that often appeals to many doctors due to its straightforward nature and economic benefits. However, in certain circumstances, pursuing a path as a non-employee or self-employed professional might better fulfill your financial aspirations, desire for autonomy, or broader professional vision. Consider these options carefully to ensure they align with what you truly want from your career.

Defining a micro-business

Choosing not to be an employee of a large corporation doesn’t automatically mean you are in private practice. Instead, it means you’re stepping into the role of a self-employed business owner. There are numerous types of small businesses that can operate as self-employed or non-employee entities for big companies. That’s why it’s crucial to recognize and define yourself as an individual micro-business. Embracing this identity opens up opportunities for growth and flexibility. This allows you to tailor your career path to your unique strengths and goals.

When I describe you as a micro-business, I’m highlighting the essential characteristics that define this professional entity. Let me explain the simple traits that are crucial for you to understand your business’s unique structure and potential advantages.

You are single member business since you are the only employee and owner
Your lean business model has one intangible product: your professional services
Your business is flexible in the marketplace including its visibility, mobility, and location
You can choose the business entity as either unincorporated (sole proprietor, LLC, etc.) or incorporated (PC and PLLC, designed for licensed professionals).
You can choose the federal tax classification of the business entity

The simplest approach to establishing yourself as a micro-business is to call yourself a sole proprietor, with the pros being a simple setup, no separate business tax filings, and total control over the business. However, the cons include unlimited personal liability. Many physicians choose this option due to its simplicity. But I recommend better alternatives due to the lack of liability and asset protection. This is crucial given our high net worth. For high-net-worth individuals like yourself, liability and asset protection is essential. Thus, we recommend establishing a professional legal entity like a PLLC or PC.

Entering the marketplace

Equipped with this individual business mindset, you can now enter the professional marketplace with empowerment and flexibility. The demand for your professional services is vast, and you should have the power to control how you leverage your professional skills and micro-business assets.

The key decision for you as a micro-business is: Will you work solely for yourself, or are you open to contributing to another business as a non-employee contractor?

The options for you as you reflect on this question are innumerable.

Let me invite you to consider these self-employment micro-business paths that are available to you:

Independent Contracting: Flexible roles in locum tenens, telemedicine, or contracted professional shift work for hospitals, such as hospitalist, allow for scheduling autonomy.
Employment Lite: This a hybrid of employment and long term independent contracting. Functionally you look and act like an employee. However, contractually and financially you are organized in a business to business relationship.
Private Practice Ownership: From solo practices to partnerships, ownership allows full control over patient care and business operations. As an interesting aside, your personal micro-corporation can own your private practice shares rather than you individually.
Direct Primary Care/Cash-Only Models: These options bypass insurance, offering direct patient billing through memberships or cash payments.
Telehealth Ventures: Telemedicine enables physicians to create virtual practices or join platforms allowing the work to be location independent.
Health Coaching/Consulting: Leveraging expertise outside clinical settings through lifestyle coaching, consulting, and medical-legal advising.
Medical Directorship/Advisory Roles: Part-time or full-time roles as medical directors or advisors for healthcare startups and and a wide range of healthcare delivery corporations such as home health, nursing homes, hospice, and others.
Functional and Integrative Medicine: Practices offering holistic treatments address chronic issues through lifestyle and alternative therapies.
Entrepreneurship: Creating software, medical devices, medical services businesses, or healthcare products as scalable business ventures.
Non-Clinical Roles: Careers in medical writing, public speaking, or business fields leverage your medical knowledge beyond direct patient care.
Education and Training: Teaching and mentoring through CME courses or career coaching for other physicians.

Conclusion

Embracing the identity of a micro-business is your key to thriving in a system that often seeks to limit your potential. This choice doesn’t confine you to private practice alone; as a licensed professional, you’ve earned the right to operate as a micro-business, and it’s time to harness this power. First, recognize its value, then start adopting the mindset in the marketplace..

As a micro-business, your primary asset is your professional services—skills that are highly sought after. This positions you uniquely to navigate the business landscape with minimal risk.

With this newfound marketplace power, you gain the freedom to choose between the stability of W-2 employment or the flexibility and autonomy offered by a 1099 position as a micro-business owner. It all starts with seeing yourself as a micro-business—a perspective that will grant you control over your career path, financial future, and professional destiny.

My take

At the time of this writing, I still work as an employed physician. For me it carries some advantages including:

Good access to the tertiary reconstructive cases that I find fulfilling,
Guaranteed salary, and
Benefits among others

However, becoming a micro business is a very intriguing option that I keep learning more and more about and certainly is a viable option that I consider for the future.

If this career option for doctors is appealing to you, you can learn more from Tod here at SimpliMD, a PPS key resource!

For more resources on the business of medicine, check out these posts:

What do you think? How do you practice? Did you make an intentional decision when picking your clinical setting? How did you do this? How should doctors evaluate their career choices? Let me know in the comments below!