By Susan Finch
Building a chiropractic practice from scratch is a thrilling and daunting process that can open the door to a rewarding career. But many chiropractors are unsure when and how to invest in their own business.
Ralph Davis, D.C., Dean of Clinics at Life University, explains that in the long run, 70–80 percent of all chiropractors will eventually own their own practices, so for most, investing in your own business is generally just a matter of time. Regardless of when you plan to take the leap into business ownership, the beginning of the investment journey often begins with how you plan to design your life.
Investing in retirement and owning a home are prudent goals, but don’t necessarily take priority over practice-building. It’s wise to think long-term about your future, both personally and professionally. Chiropractors should consider their career and personal lives as strategically entangled. For example, working and planning for retirement may take precedence over buying a business, instead of waiting a handful of years to make the leap. But buying a home with a significant mortgage could delay your ability to set up an income-generating practice.
There are also ways to combine both your professional and personal goals into one. If home ownership is an absolute necessity, consider building your practice out of your home and invest accordingly to meet those goals. A home-based chiropractic clinic may require a larger living room to serve as a waiting room, a strategic layout to separate bedrooms, ample space to practice and a convenient location for patients.
Of course, the challenges of investing in a business go far beyond choosing a location to launch your practice. Scott Bautch, D.C., chairman of the board and chief executive officer for Allied Health Chiropractic Centers, warns that the No. 1 mistake doctors make when opening a practice is the same mistake most businesses make: not understanding cash flow. “They undercapitalize the amount of money they need to run the business,” he says. “Secondarily, they do not understand where to allot the money they are able to secure.”
Bautch recommends finding a mentor to help understand practice survival and starting with the basics. That includes securing phones, adjusting equipment, a minimum inventory of office supplies and avoiding purchasing mistakes like new equipment, expensive X-ray and processing equipment and costly physical therapy equipment. “Vendors will convince you that you need everything, and that the return on investment is almost magical. Don’t listen. Calculate the number of patient services done, the time to full collections and cash flow—keep it simple.”
Melissa Diller, D.C., of Diller Chiropractic suggests prioritizing by hiring out your weaknesses first, like billing or graphic design to build a website authentic to your business. “Your website is the face of ‘you’ and is the electronic representation of your practice,” Diller says. However, without regular maintenance, a website can quickly turn into a poor representation of yourself as a chiropractor and your practice, so it’s important to continually update the site with fresh content.
Diller goes on to say that investing is also important in terms of you investing your own time and relationship, not just money, into building a practice. Investing in relationships means attending conferences, seminars, networking events and social gatherings. “Your relationships will be the things that bring you patients in the long term.”
Chiropractors launching a brand new business may have little resources to offer past adjusting equipment and a phone. But there are ways to get creative and save on expenses without cutting corners. X-ray processing, copies and billing can all be outsourced to save on overhead costs and time. Furniture, artwork and office needs can also be rented for the short-term until cash flow picks up. Chiropractors could also consider sharing office space and equipment with other colleagues launching a practice to cut down on expenses.
Davis suggests investing in your brand when building a chiropractic business. He points to examples of how hotels strategically build both tangible and perceived value. A traveler should instantly know the difference between the Four Seasons and a Holiday Inn simply by standing in the foyer of the hotel lobby. Just because the rooms will both have beds and standard hotel amenities doesn’t mean they’re attracting the same clients or offering the same price point.
It’s important for your business model to suit your own personality and business philosophy. One chiropractic practice may want to resonate with patients seeking modern, technologically advanced services, complete with patient X-rays viewed on a high-definition television. Meanwhile, the practice down the street might offer an ambient spa setting with a relaxing fountain and soft lighting. Everything from the website, to the waiting room, to the practice, to the chiropractor’s adjustment approach should communicate together; otherwise the entire practice will feel out of sync.
While most health care professionals, such as dentists, see their patients once or twice a year, a chiropractor may see the same patient multiple times in a single week. The patient should view their practice of choice as a welcoming and familiar setting where they willingly spend a significant amount of time. So, in the long term, investing in a quality couch isn’t necessarily an indulgent decision if you’re trying to attract clientele looking for high-end services. Of course, it takes time to build a deliberate portfolio of office space, equipment and amenities, all while getting a new business off the ground. It doesn’t happen overnight, but a new chiropractor needs to know what their investment strategy is from the start to create a cohesive business.
The investment question doesn’t end once the groundwork of how to set up a business is established. Seasoned chiropractors spend a significant amount of time and money to secure their degree, attract clients and build a viable business. It’s inevitable that a successful chiropractor might consider harnessing his expertise as a seasoned entrepreneur to take new steps in investing in other businesses.
While some elements of entrepreneurship transfer from the chiropractic table to other businesses, many skills do not. It’s tempting to believe building a successful business is easily replicated and reproduced with a few key elements. But overhead, marketing, liability and insurance issues are also completely different from one business to the next. And, most importantly, unless a chiropractor has a passion and expertise for an industry like fitness, they are wise to invest in what they already know and has proven to be successful.
Instead of using money to invest in entrepreneurship, chiropractors should look to invest in their own expertise. Expanding a practice to serve more patients, offering stress reduction classes, adding acupuncturists or massage therapists to their team or opening up additional practices are usually wiser choices.
Regardless of where you are in your business journey, the real key to knowing when and how to invest in a chiropractic practice is to step back and look at the big picture. Start with the basics and then add according to your long-term goals. As a new chiropractor tackling a business, ask yourself how your investment will benefit your career and, more importantly, your patients’ needs. From there, prioritize your assets accordingly. Remember as Bautch points out: “The asset you need to use the most is you.”