How a Self-Employed Pharmacist Can Profit Greatly (How to become a self-employed Pharmacist – Part 5)

by Marvin on December 7, 2009

in Coaching Series

Emotional Profit

If you’ve caught this coaching series in the middle, please take the time to start at the beginning of the coaching series and get yourself caught up!

Last week, I talked about Understanding What Your Business Really Offers.

So you now have an idea of how your client benefits from your services. It’s time to learn how you benefit from practicing pharmacy this way. This week’s lesson is fun and motivational. So sit back and take notes.

This lesson as is titled “How You Profit from Being a Contract Pharmacist”.

I hope you can articulate to your potential clients why they should do business with you. For now, let’s get started.

Where’s the Beef?
What’s the big deal? How do you benefit from doing this? You benefit from being a self-employed contract pharmacist in six main ways.

Better Pay
Your rate will fall between the going rate of a pharmacist in your client’s pharmacy and the rate the relief agency charges. I recommend giving your client a good savings. In other words don’t just cut them Five dollars savings over the relief agency. Offer something reasonable but something you’re happy with as well.

Tax Advantages
One of the main advantages of going into business yourself is the ability to write off taxes. It still amazes me that people don’t see the advantage. I don’t want to go through every example here. It would take a book size article to explain it all.  So here’s a video explaining it followed by text basically saying the same thing.

This is the table of the two pharmacists all things being equal except for the fact that one person is an employee and the other is self-employed.

Self-employment and employment comparison

Self-employment and employment comparison

Jack and Jill both make $110,000 and both pay for health insurance. Each pays a premium of $3,600 a year (Most people don’t know that their health premium is deducted from their paycheck). Each pays taxes at a 39% rate.

Since Jack is an employee he cannot deduct his health insurance. Jill can deduct her premium from her taxable income.

So Jack pays .39% based on $110,000 income but Jill pays 39% at $106,400.

When you compare the outcome side-by-side in this example you see that Jill makes a $1,404 difference.

Skip this portion if you DON’T want more detail
This is a simplified example. For a full time employee any health insurance premiums you pay, including some long-term-care premiums based on your age, are “potentially deductible”. But you have to add these to your medical expense pot. Medical expenses have to exceed 7.5% of your adjusted gross income (AGI) before they give you any tax benefit.

If you’re self-employed and not covered by any other employer-paid plan, though, you can deduct 100% your health insurance premiums “above the line.” Above the line means the expense is included in adjusted gross income and doesn’t get lumped in with itemized deductions. That means that not only do you not have to exceed the 7.5% floor, you don’t even have to itemize!

Since you’ll charge more money for your services, you benefit even more. This is just one of many examples of how you benefit taxwise. We’ll post more articles on this subject as well. But don’t just take our word for it, consult with your tax account.

Stability
You’re essentially screwed if you get laid off as a full time employee (unless of course you this on the side).

You have to find another position to replace your full income.

One of our recommended strategies involves working with more than one client. Once you have several clients, your cash flow is more stable than having one employer full time.

If one client discontinues services, you have other clients to rely on. You only have to replace a part of your cash flow.

Gain personal control
The combination of being self-employed, self-reliant and growing your client base – gives an individual freedom of choice. You have power to decide which clients you want to work with and when.

Even when it comes to your health coverage the decision is up to you. You decide what coverage you want and with whom.

Instead of picking through the more limited choices of your employer. You do the legwork and pick the right plan for you and your situation.

Don’t worry too much; we’ve gotten a few requests for health insurance information. We’ll be posting articles on health insurance sometime down the line to help you decide.

Learn from the best
I have a saying “successful habits rub off success people”. In your business, you will run into pharmacies that are strong and run well.

These owners are gems. Learn from them. Let their habits rub off on you. They may very well improve how you yourself conduct business now.

If you have any aspirations of owning a pharmacy one day, they may very well take you to the next level. Who knows how much you can learn from them.

Emotional Profit
Successful self-employment requires self-reliance. You’re required to get clients. You’re required to depend on yourself. Once you do it and succeed, you feel accomplished and purposeful. With it self-satisfaction and happiness follow.

So there you have it. Six major ways you benefit from being a Self-Employed Contract Pharmacist. You might even say there is no reason to NOT do this. So, what are you waiting for?

Next Week’s Lesson – Setting up Your Business Tool Box

We looked into how you benefit from being a Self-Employed Contract Pharmacist.

Next week, we’ll cover what you need in your business toolbox to protect yourself and your client.

This concludes this week’s lesson. Keep these benefits in mind when you start asking yourself “why am I doing this?”

If you liked this article why not take advantage of your time now and leave us a comment or better yet sign up for our newsletter it’s 100% free and you can get our articles and announcements by email!

Photo by: TaAaDaAaM ! by (-(-Tchi Tcha -)-)

Want to break away from the chain pharmacies? Need help getting started as an Independent Pharmacist? Want an advantage over the competition in your area? Check out our Starter Package!

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Setting up Your Business Tool Box (How to Become a Self-Employed Pharmacist – Part 6)
December 21, 2009 at 5:31 am

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1 Fariba Ghaderpanah October 14, 2012 at 12:55 am

May I possibly see the list of different chapters and subjects covered in the starter package before purchasing the book please, just to make sure this is what I’m looking for.
Thank you
Fariba Ghaderpanah

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