Start a registry company

Nurses Entrepreneurs

Published

I am hoping for some advice on starting a registry, with one employee, myself, to start.

I have been working full time registry for 2 years and work almost exclusively at 2 hospitals. I feel like it would be beneficial to cut out the middle man, my currently registry employer, and bill the entire wage for myself.

I am familiar with opening a small business and starting an LLC due to the experience of family members, but am looking for general guidance on where to start regarding the legalities of starting this type of company. The state I work is California, can anybody give me advice? I realize it may take a hospital 30 days or more to pay my invoice, which I am prepared for.

Any by help would be appreciated.

NedRN

1 Article; 5,773 Posts

There is not much in the way of legalities. You can do business as a sole proprietor and while hospitals theoretically care, most will never notice your business type. The issue with incorporating in California (including LLC) is that there is a minimum franchise fee of $800 a year. That is perhaps the cost of doing business, but it is unnecessary unless the hospital makes an issue of it. You don't need the limited liability aspect of those entities because professional malpractice is about all the liability that you will have and a corporate shield does not protect you from personal professional acts. If you hire others, then yes, by all means. Or if you determine that the benefits are worth more than the cost. I have a C corp (you can elect this tax status as an LLC but it is unusual for any small business) and all my health care costs down to aspirin and the drive to the drugstore are paid by the company pre-tax.

For professional liability you will need insurance, and the hospital will require it, typically 1/3 million. The hospital will also require general liability. From a company such as NSO/HPSO, both will cost you between $500 and $1,000 a year. Other than a contract, that is the only document from the company side the hospital will require.

Contracts are usually the scariest part for those starting an agency. But there is really not much to them. Just outline the responsibilities and expectations of both parties and you are done. The hospital may have a uniform contract for agencies already but it is more normal for the agency to provide the contract. A friend in HR (more about this below) may be able to give you a contract copy for you to base your own contract on.

While these hospitals know you already as a practitioner, you have to provide the same QA documents again for your employees (yourself in this case). The minimum is a work history, skills checklist and two written references. That is upfront. Once a decision to employ has been made, you need to follow up with a background check (which may include additional things like OIG, GSA, and sex offender), physical clearance with vaccinations and titers, and credential copies.

Pretty simple stuff really, but none of that matters if you can't get in the door. I would talk to HR or staffing first and see if it is possible. You may have to be persistent as the first words out of their mouth will be that "we already have too many vendors". You probably need an ally, HR would be ideal, but your manager may be able to help. From the hospital perspective, adding you as a vendor gets them nothing but one more contract and accounts payable to keep up with. About all you have is a proven track record and the ability to walk away leaving a hole in their staffing (which of course you don't want to do). But selling your agency will be mostly about retaining a valuable and known contingent staffer.

You have one additional gotcha. Your existing agency contract may have a non-compete clause that will not allow you to work at those existing hospitals through any other agency for 6 months or a year. While such clauses do not hold up in court for individual ordinary workers, they do hold up on business to business contracts. So the hospital may not allow you to work for another agency. Take a close look at your existing contract.

VerCellPen

7 Posts

Great information, thank you for your reply. With your c-corp status, are you doing what I have outlined, yourself? Working as a sole proprietor? Is anybody else included in this?

How do the taxes work? With other llcs I am familiar with, they use pass-through taxation. Would this be the case here? Are you technically a generally contractor in the eyes of the IRS or a w-2 employee?

I already have personal through nso, for roughly $100/yr as an RN. I assume this would NOT suffice in this case?

Lastly, if another registry RN or two wanted to join me in this route, would joining forces save money to split the costs of business start up, or just complicate things incredibly?

Thanks for all your help.

NedRN

1 Article; 5,773 Posts

You don't really have start up costs, you have ongoing costs of insurance, and franchise fee if you go that way. As such, the costs are trivial, even adding a dedicated phone and fax (online service is easiest and cheapest). You are more likely to have issues with partnerships than costs so I wouldn't recommend it.

Most small businesses that are not a sole proprietor pick a pass through entity. Picking a C corp is highly unusual for small businesses, but it made sense to me. But part of my calculation was that I was a traveler and there are some taxation issues there that don't apply to you. Benefits are better with C corp, accounting is perhaps simpler with pass-through. Benefits are the primary reason sole practitioners incorporate (there is no liability benefit), but if you are considering employing others, you should incorporate. I also hire other travelers on occasion, so incorporation works for me there too.

As a C corp, I pay myself on a payroll and all my taxable compensation is W-2 (required). Pass throughs don't need to bother with payrolls for themselves. If you hire others, paying them as a 1099 will save you the hassle of running payrolls, as well as unemployment and workers comp. I forgot about those, some hospitals will want to see documents proving coverage.

Nope, your personal malpractice policy will not work, plus you need general liability.

+ Add a Comment