Author: Nutri-West NY

Recently, Dr. Jason Horowitz of Nutri-West New York visited with students at the Northeast College of Health Sciences, formerly known as New York Chiropractic College.

He asked the attendees to carefully consider what type of chiropractor they wanted to be upon graduation. Then he challenged the students to become full spectrum, natural healthcare providers.

The Full Spectrum Natural Healthcare Provider

To achieve optimum patient outcomes and build a successful and profitable chiropractic business, the clear path forward is in providing a full spectrum of services. This includes a minimum of:

• Osseous adjusting
• Applied Kinesiology
• Nutritional counseling
• Supplementation programs
• Exercise and lifestyle guidance
• Muscle and clinical testing to aid in the differential diagnosis.

Just imagine the patient loyalty and referrals you would garner by using every tool you have available to improve the health of your patients.

For example, a patient presents with a complaint of continuing pain in the arm. Instead of relying solely on osseous adjustments, you perform muscle testing and identify weaknesses that could be tied to dysfunction in the pancreas. You order blood tests that confirm improper glucose levels. 

Now, in addition to adjustments, you add nutritional supplementation and counsel the patient to make some dietary and lifestyle changes including more exercise. When you re-do your blood tests in several months, not only does the patient feel better, but their bloodwork looks better too.  You’ve done more than resolve pain, you’ve improved the patient’s health and quality of life.

That’s the powerful healing potential of a full spectrum natural healthcare provider. 

The Students React

Clearly, this challenge was a new way of thinking for some students. According to Chris Singh, a student that attended the lecture, “Dr. Horowitz really told us and showed us what it is like to work in chiropractic care after we graduate. The school gives us a solid foundation, but he brings years of knowledge and experience in the field for more than 20 years. I know whether I open my own practice or work in another’s clinic, I’ll be using Applied Kinesiology and supplements 100% in my practice.”  

Chris plans to work with mixed martial arts fighters after graduation and now sees how fighters can benefit from neural supplementation to fight inflammation. 

Ready to Change Lives – Including Your Own?

Are you ready to make a change in your approach to chiropractic healthcare?

Nutri-West and Nutri-West New York support continuing education for any licensed practitioner in the seven states of New England and getting you one step closer to becoming a full spectrum natural healthcare provider.

Earn CE credits or just expand your understanding of a specific topic such as functional methylation.

Sign up to take advantage of Nutri-West New York’s in-person and virtual seminars. See what seminars Nutri-West is offering across the country. 

When you offer full spectrum natural healthcare, you’ll increase your effectiveness as a practitioner. You’ll change the lives of your patients for the better. As a healthcare provider, you’ll get the satisfaction of serving your patients to the best of your ability and generate more referrals.

Whether you are retiring or making a career change, selling your chiropractic practice takes time and can be stressful. It takes careful preparation to realize top dollar. You’ll want to rely on the services of professionals to guide you every step of the way. This high-level view of how to sell a chiropractic practice will outline the steps from start to finish. 

Get Your Business in Order

Every broker and potential buyer will want to pore over your financial statements. Make sure your balance sheet and income statements are current. If you haven’t filed your tax returns for the prior business year, it’s time to get that done!

Not only do you want your financial statements to be accurate and current, but you also want to show that your practice is growing and profitable. Consider expanding services or adding new revenue streams. If you aren’t already offering nutritional supplements, talk to Nutri-West New York about how to grow your practice before you put it up for sale. Buyers look for the strong cash flow that supplements and additional services generate. 

If you use your company accounts to pay for personal expenses, it is time to stop that practice. It’s a good idea to keep company and personal expenses separate. Co-mingling expenses muddies the financial statements and the financial health of the practice. 

Strategize With Your CPA

Even when you are in the “considering it” phase of selling your practice, you should strategize with your accountant.

Chances are, you’ve previously been following a strategy that minimizes income to reduce your tax liability. That might be appropriate when you plan on owning your practice long-term, but if you are even thinking about selling, you need to develop a new strategy with your accountant. 

Potential buyers and their lenders will want to go over your tax returns. Your tax returns and current financial statements are the basis for the sale. Don’t be surprised if the broker wants to look them over too. Everyone wants to see the practice earning revenue and paying taxes on the profit.

In the three years before your practice comes up for sale, you want to show as much revenue as possible. That could mean implementing a new tax strategy.

Review your Lease

If you rent your office space, you’ll want to review your lease. Buyers and their lenders are looking for long-term leases. So, see how many years remain on your existing lease.

You’ll also want to review clauses about the assignment of the lease. If you sell the business, can the buyer assume the lease, and will you be released from liability?

If you aren’t comfortable understanding the lease language, ask your attorney to review the lease as well. 

Interview Brokers and Review Valuations

Once you’ve got clean financial statements and know where you stand on your lease, it’s time to begin interviewing business brokers.

You don’t want to try to sell your chiropractic business on your own. A business broker with extensive experience selling medical care practices and chiropractic practices is well worth the commission you will pay.

Brokers approach business valuation from different points of view. The most common methods of valuing a chiropractic practice are the income approach, market approach, and cost approach.

Income approach

This approach either capitalizes current earnings or cash flow, or discounts future earnings or future cash flow. It focuses on calculating the present value of the future benefits the new owner will receive.

Market approach

This valuation approach assumes that your practice will sell for about what other practices in the area are garnering at a sale. Of course, if there is limited activity, the data set will be small, and the valuation will be difficult. This approach looks at the average sales price and compares your practice to the practices that sold. 

Cost approach

The cost approach looks at the value of the business assets. Assets include furniture, fixtures, medical equipment, office equipment, and goodwill. With a chiropractic practice, goodwill is one of the most important assets. A thriving practice depends on good relationships between the practitioner, office staff, and the patients. 

Hurry Up and Wait

Depending on your location and the economic conditions in your area, your practice may sell in as little as six months, or it may take a year or longer. It may never sell. 

A healthcare-related practice in a highly populated area will generally sell faster than one in a rural area.

Continue business as usual with a focus on maximizing your revenue streams and profit while your practice is up for sale.

Consider When to Notify Staff

Telling staff that the practice is up for sale is a sensitive subject. You’ll want to get advice from your broker.

You don’t want to notify staff until you have a serious buyer with qualified financial backing. Inform staff too soon, and they may become anxious about their future and seek employment elsewhere. Buyers are looking for a practice with long-term staff. If you wait until the practice sells, the staff will feel bitter. This can harm the relationship with the new owner.

Opening your practice required careful planning and strategizing. Selling your chiropractic practice requires the same.

Are you ready to graduate and wondering how to start a chiropractic office? Or have you already graduated and are now considering the next step in your professional life?

Starting a chiropractic office and entering the world of alternative health care doesn’t look the same for every person. Here are four approaches you can take.

Start from Scratch

Opening a new practice was the traditional route chiropractors followed for many years. However, it isn’t easy, and it is expensive. Getting your business off the ground requires you to focus on the business and not on treating patients. Here are the general steps to follow. 

Start by developing a business plan. If you aren’t sure where to start, our guide to developing a business plan for a chiropractic office is a good place to start. This plan should help you solidify your mission, vision, and values that provide the foundation for your alternative practice. 

Next, you’ll need to find an attorney and set up your business legally. Most professionals recommend against operating as a sole proprietor because it leaves you legally liable for debts incurred by the business. These days, many practices operate as LLCs or PLLCs. You must also find an accountant that works with healthcare businesses. 

Secure your license and malpractice insurance before proceeding further. 

As part of the planning process, you’ll need to identify a location for your new chiropractic office. Look for space with high visibility, accessible parking and ground floor location. It probably won’t be an office building, and that’s okay. You’ll also hire contractors and designers familiar with creating comfortable health care spaces to plan and build the space out. Remember, this might be your work area, but it must primarily conform to patient needs and tastes.

Before you get much further, it’s time to finalize that business plan and secure financing. Starting costs will be at least $100,000, and you’ll also want working capital. Check out our article on how to secure financing for a chiropractic office.

Once you have money, it’s time to build out, purchase equipment, and hire your staff. Take care in selecting your staff. You are building a team for success. Before hiring, list all the tasks that must be performed and then decide what you will do and what you will delegate. Hire the people that free you to pursue your passion. 

Hang on for the ride of your life. Starting a chiropractic office is rewarding, frustrating, exhilarating, and a ton of work. But you’ll be building something of your own. 

Buy an Existing Practice

Instead of starting from scratch, you may consider buying an existing practice to start your chiropractic office. 

People retire or leave their alternative health care practice for other reasons regularly. If you buy a thriving existing practice, you may get more for your money in the long run. Instead of using the $30,000 you’ve saved to start a business, use that money as a down payment to buy from an existing practice. Buying a practice with a steady stream of existing patients is buying an established revenue stream. It already has forward momentum. It’s up to you to just keep it moving forward and growing. You’ll still need to create a business plan and secure your lending. But the office, equipment, and staff will already be in place. 

Share an Office with Other Professionals

Want to strike out on your own but don’t have the resources to start an entire stand-alone practice? There is a growing trend for chiropractors to share space with other healthcare professionals.

Consider joining forces with massage therapists, acupuncturists, physical therapists, and athletic trainers. These professionals may have room in their clinics for you to set up shop.

This arrangement is a win-win for professionals because it allows you to share expenses. It also benefits patients by giving them multiple options to meet their wellness needs.

Consider Starting as an Associate

Maybe the best way to start a chiropractic office is to work for someone else first. Think of it as getting paid to receive on-the-job training. When you serve as an Associate Chiropractor at another office you learn the business before starting your own business.

This helps you improve your skills in chiropractic care by working with a mentor. You’ll also see what’s involved in the day-to-day operations of a successful chiropractic practice before branching out on your own.

Working for others provides an opportunity to learn back-office functions such as billing, insurance, accounting, marketing, and office administration.

If you are concerned about earning less as an Associate Chiropractor, remember when you start a practice from scratch, you’ll often be the last person paid.  While you learn the ropes, you may make more and bank more towards starting your own office.

If you take this route, be wary of any non-compete agreements the hiring chiropractor may ask you to sign. Signing a non-compete could lock you out of the market for three years.

Whether you personally manage the operations of your chiropractic office or delegate this responsibility to an office manager, as an owner you are ultimately responsible for how well your chiropractic office is managed.

Here are 5 tips to help you effectively manage your chiropractic office.

Put Systems in Place

In chiropractic school, you learned about systems in the human body. Well, businesses need systems too. In your chiropractic office, you’ll need to put into place people management systems and practice management systems. Many of these systems offer a cloud-based option so there is no need to maintain an on-site server. 

People management systems

Your success will depend on how well you can attract and retain people that align with your practice philosophy and approach to care. People management systems make this easier and provide the structure necessary for human resource management. 

You’ll need software for tracking hours, benefits, and payroll. Often payroll and time tracking services are offered by your bank or accounting software vendor. In addition, you’ll need a system for creating and maintaining job descriptions, processing job applicants, onboarding new employees, and performing regular performance reviews. 

Practice management systems

Practice management systems handle the patient workflow and can either integrate with medical claim billing systems or perform your claims and billing function.

These systems handle patient scheduling, check-in, treatment documentation, and follow-up appointments. Select a system that was specifically designed for use in chiropractic offices to ensure compliance with patient data safety regulations. 

Develop Key Performance Indicators

Your business success depends on the health of key aspects of the practice. While each practice is different, most chiropractic offices measure common key indicators of performance. Feel free to develop your own key performance indicators (KPI).  Just make sure the KPI is specific, measurable, relevant, and tracked regularly. Here are a few KPIs to get you started:

• Profit in dollars
• Profit margin (as a percentage)
• Cash on hand
• Net promoter score
• Average charge per visit
• Average collection per visit
• Patient retention
• Patient churn

These KPIs give you an understanding of the financial health of your practice, whether your practice is growing or declining, and how well you are serving your patients. 

As important as it is to develop KPIs, it’s important to take regular measurements. Not all KPIs should be measured for the same time frame. While you might look at cash on hand on a weekly or monthly basis, your net promoter score may be calculated quarterly, and churn might be measured twice a year. 

When results fall short of KPI benchmarks, it is important to include your team in the analysis as well as the development of action plans. 

Develop Routines

If you don’t have a routine, you may find yourself lurching from crisis to crisis. Establish regular routines that keep you fresh and provide predictability to your office staff.

For example, after a morning of osseous adjustments and patient consultations, do you need some quiet to re-center, or does a trip to the gym sound better? Develop a daily routine that leaves you refreshed in the afternoons, so all patients receive equal care, no matter the hour of their visit. 

Your weekly routine should include team meetings that look at the hits and misses of the prior week. You can also use team meetings as an educational opportunity to introduce new services or products. 

A monthly routine should include a review of KPIs and a comparison of billables to collectibles. Review the number of patients served and the number of unique visitors to your website. 

Practice Transparency

Bring transparency to your practice when allowed by law. Transparency is a hallmark of a trusted and respected manager. 

Transparency is important to running an effective, efficient, and productive alternative health care practice. Be honest and open in communications with team members and encourage them to reciprocate. 

Use team meetings to break down silos between the front and back offices. Avoid hierarchies and invite questions. Major changes in the organization should never be a surprise. 

Establish Procedures and Protocols

In addition to your own routine, create routines for other team members. Determine in advance how staff should handle certain situations. 

For example, do you require payment in 30 days? If so, how does the front office handle scheduling for a patient that is 45 days past due?

Does each team member have an opening and closing procedure? Establish how each employee should start and end their day to ensure all tasks are performed.

It’s not enough to establish your practice policies and procedures. Document them and share them with all team members. Review policies regularly in team meetings and determine if changes need to be made. As data privacy regulations change, make sure your patient data procedures are in compliance.

Managing a Chiropractic Office is Managing a Business

Remember, you may have entered alternative health care practice because you have the heart to serve and heal others. But every successful chiropractor needs to also have a head for business.

Take advantage of opportunities provided by your local Chamber of Commerce or professional associations to learn how to be a more successful business owner.

Few chiropractors have the financial resources to purchase an existing practice or make a major expansion to their practice. Fairly or not, many lending institutions treat chiropractic business loans differently than loans to other businesses. A recent graduate of chiropractic school generally has much in the way of student debt and little in the way of assets. 

Whether you are looking to expand your practice, buy a new location, or purchase an existing chiropractic practice here is what you need to know about chiropractic business loans. 

Reasons for Borrowing

The reason for borrowing has an impact on the type of loan you’ll take out and the sources of funding available to you. 

In general, the purchase of real estate (whether it’s to buy land or a building) may allow you to borrow more money, but the process can take longer. That’s because the lender will want to use the purchased land or building as collateral, and that means inspections and appraisals of the property. 

A chiropractic business loan to purchase an existing practice will also take time. 

On the other hand, financing the purchase of digital radiography equipment, cold laser treatment equipment, or an EMG machine to upgrade and modernize your office can be approved and funded in just a few days. Same for purchase of computers and monitors for office use. 

In general, the lower the amount borrowed and the lower the risk, the faster you can get your hands on the funding. 

Types of Loans

The type of loan you need for your chiropractic business depends on the amount of money you need to access and the length of time you need to use it.  The type of loan you need is a key factor in determining where you should apply for financing.

The most common types of chiropractic business loans are long-term loans, short-term loans, and loans to fund the purchase of equipment. 

Long-term financing

This is the most difficult financing to obtain but they also carry some of the lowest rates. These loans can be for 10 years or more. They are used to purchase land, buildings, or even the acquisition of an existing chiropractic practice.

Expect the paperwork and length of time for the approval to be the longest for this type of loan. 

Short-term financing

Short-term loans are generally used as a means to help you through a cash flow crunch. The term of the loan is usually one year or less and the interest rates are higher than the rate on a long-term loan. 

Use short-term financing to help when cash is short but payroll and other expenses are due. Often, a short-term loan can be set up as a line of credit that’s accessed when necessary. Before using short-term financing, consider how long you will need the money and compare the rate to your lowest credit card cash advance rate. 

Equipment purchases

Equipment loans are made for the express purpose of purchasing equipment. Often your medical equipment dealer will offer to finance directly or help you arrange for financing with a lender with which they already have a business relationship. 

These loans use the purchased equipment as collateral and can offer lower interest rates than other short-term financing options. 

Sources of Financing

Depending on the amount of money you need to borrow, you may turn to several sources for a business loan.

It’s important to remember that Small Business Association (SBA) loans aren’t issued by the SBA. The loan is made by the bank or credit union and the SBA guarantees a portion of the loan. This generally results in a lower interest rate on the loan. However, the SBA sets limits on the amount you can borrow and the amount the SBA will guarantee. 

Local bank/community bank

The best source of financing for your chiropractic business loan may be your local community bank. These smaller, independent banks focus on lending in their community. It helps if you have already established a relationship with the bank with either a business checking or payroll checking account. 

Commercial banks

These banks are large, nationwide banks. When borrowing here, be prepared for the tightest lending standards and the highest rates. You’ll probably also encounter the most red tape. 

Online lenders

Many online business lenders have popped up over the years. If you need a quick loan for a small amount of money, this might be your best option.

If you are an established chiropractic business, you may find you can get a loan in just a few days at most. You’ll also find the highest interest rates. 

Preparing to Apply for a Chiropractic Business Loan

Before you head off to the local community bank or credit union or start that online application, there are a few things you’ll want to do to prepare.

Brush off your chiropractic practice business plan. Unless you are applying for equipment financing or a short-term, online loan, the lender will want to take a look at your business plan. Use the loan application process as an impetus to update your business plan. 

Pull together industry information. The lender will want to know what’s happening in the industry. By having this information at your fingertips, you’ll be prepared to answer any questions. 

Update your financial statements. If you only prepare quarterly financial statements, you’ll want to create an interim quarter-to-date set of financial statements.  

File any outstanding taxes. When applying for long-term loans or loans from commercial or local banks, the lender will want to see a copy of your most recent tax returns as a means of verifying your financial statements. 

Growing Your Chiropractic Business

Not all business expansions require a large capital investment. If you would like to know how to grow your chiropractic business by growing your cash flow, schedule a consultation with Nutri-West of New York.