Chiropractic Marketing Articles
December 1, 2006 on 2:42 pm | In online resources, marketing, chiropractic | Comments Off For their 50th anniversary a couple of years back, Chiropractic Economics posted a pile of free marketing articles on their website. There's enough weekend reading here to keep you busy for a while...http://www.chiroeco.com/50/market/index.html
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Practice Help for Chiropractors
Practice Help for Chiropractors
July 3, 2006 on 1:25 pm | In online resources, office management, chiropractic | Comments OffQ: How Do I Value A Chiropractic Practice? (Part 1)
January 1, 1970 on 8:00 am | In chiropractic | Comments Off“I’ve got an opportunity to buy some patient files from another chiropractor, but I think the price is high. How do I know how much to pay?”Good question. Let’s assume for the moment that buying files in general is a good idea. (I think it is.)
Valuing a practice – or any business – can be quite complicated. There are companies and professions dedicated to the process, and most are reluctant to “give away the cow” as they say. Between that and the fact that there’s no single, correct answer, it’s tough to find good info online.
Business values are affected by many factors, such as profit, revenue, the economy, real estate, debts, goodwill, branding, patents and assets to name a few. Let’s assume we’re just talking about files for the moment – you can always get some advice from your accountant or lawyer on equipment and other assets.
I can’t tell you how much to pay from your question alone, but I can tell you what makes files worth more, and what makes them worth less. These factors apply to just about any alternative health practice – nauturopathic, TCM, acupuncture, massage, homeopathic, etc.
Age
The longer since the last visit, the greater the chance that it’s a “dead” file, and you won’t see the patient. A patient who was seen last week is worth more that one who hasn’t been in since last year.
Visit frequency
A full house beats three of a kind, and a patient who comes once a week beats one who comes once a month.
Acute vs Preventative vs Chronic
Patients who come regularly for good health are worth more than those that just come for a back pain, or a car accident. And of course, though it sounds opportunist to say it, a patient with a long-term chronic condition is worth more to you than the one-time acute visit.
Competition
If you’re the only game in town, the files are worth less because a) the patients have nowhere else to go and b) the other chiropractor has no one else to sell the files to. Conversely, if there’s a lot of competition, the files are worth more to you – they’ll help your practice, and keep those patients at your office instead of your competition’s.
Practitioner similarity
If you’re a subluxation-based chiropractor, for example, and you buy files from a chiropractor who isn’t, your modality may not jive with the patient, and you could lose them. The closer the other chiropractor is to you in terms of treatment modality, the more success you’ll have converting the new patients.
Vendor participation
The more willing the doctor selling the practice is to assist in the transition, the higher your conversion rate. A doctor who wants to hand you a box of files and walk is not as helpful as a doctor who will help transition the patients, and give their “blessing” to the new arrangement.
Referrers
Patients who refer are worth their weight in gold. This is generally tough to tell, but some chiropractors track their referral sources.
Now the big “but”: it’s generally very difficult to get the information I’ve mentioned from vendors. So what tends to happen is a lot of talk about “gross this” and “net that” and “two years this” and “x percent of that”. This is where many CAM practitioners start running for the door.
Is there a way to simplify things? I think so…
Next time: crunching the numbers. (Part 2)
Q: How Do I Value A Chiropractic Practice? (Part 2)
January 1, 1970 on 8:00 am | In chiropractic | Comments Off(Click here for Part 1)
When you buy a practice, you’re making an investment – you’re putting your money somewhere in anticipation of it multiplying. So just like stocks, mutual funds, or your savings account, you want the best return on your investment (ROI).
The simple formula for ROI is:
ROI = (benefits/costs) x 100
If you spend $10,000 (your “cost”) on stocks, and those stocks are worth $12000 at the end of the first year (benefit), that’s a 20% ROI.
My general rule of thumb is that I like purchased files, at a minimum, to pay for themselves in a year (100% ROI). That means after 12 months, the files are paid for, and starting to generate a true profit.
That’s just my number – you can use whatever makes sense to you. I’m just comfortable with that range. Unlike stocks or real estate, patient files may go stale a little sooner, and you can’t necessarily turn around and sell them again, so the ROI concepts are a little different. If a patient you’ve “bought” hasn’t come to see you in the first year (or much sooner), there’s a good chance they never will. So I like high rates of return.
From here, you can use two numbers:
- How much is an average patient worth to you in a year?
- In the practice for sale, how many patients have been seen in the last 12 months?
Let’s say you have an opportunity to buy a practice that has 500 files, 200 of which have been seen in the last 12 months. As a chiropractor, you might know the average file is worth $350 a year. (I’m making this up, but have a look at your numbers. Take your annual revenue and divide it by the number of live files that year for a rough estimate.)
200 files x $350 (your average) = $ 70,000 in annual revenue. Now just divide that figure by your desired ROI, and you’ll get the price you should be willing to pay for the files less than one year old.
For example, if you want to get back all the money you spent on files, plus make a healthy profit in a year – say a 150% ROI, you’d want to pay no more than $70,000/1.50, or roughly $47,000.
What about the fact that there are 500 files? My inclination is to ignore anything older than a year, but that’s affected by the market, your industry, how effective you are at marketing, and just how plain good of a CAM doctor you are.
Grow Your Practice with Newspaper Inserts
January 1, 1970 on 7:00 am | In practice growth, marketing, practice growth tools, chiropractic | Comments Off I had an inquiry last week from Taradel, a print services firm that does some specialty print work in the CAM/holistic industry, particularly with chiropractors. If you're in the US and considering any print work, particularly newspaper inserts, you may want to check them out. Here's a snippet from what I received from them:Business owners who visit Taradel.com are able to plan, design, target, print, and deliver full-color newspaper inserts and flyers directly into the homes of potential clients.Taradel offers a bunch of free practice growth resources on their site, as well as a number of other print services like postcards, booklets, etc. I know there are a zillion printers out there, but sometimes it's helpful to deal with someone who has some experience with your market, and testimonials to boot. If you give them a try, let us know how it goes.
Dr. Glenn Muller, an innovative chiropractor who runs a family-owned practice in Richmond, VA, has used print advertising to become one of the area’s premier spinal correction centers. “We order at least 50,000 newspaper inserts at a time and we distribute them on a weekly schedule. As soon as our inserts go into circulation we receive phone calls and schedule new appointments for the following ten days.” Muller’s practice, the Spinal Correction Center of Richmond, has successfully combined patient testimonials, high quality graphics, and valuable information pertaining to their new spinal decompression practice into their practice growth campaigns.
Taradel offers a growing library of chiropractic marketing resources, free of charge, for practice owners to review and incorporate into their own advertising. The site features free podcasts, in-depth articles, instructional webcasts, and even samples of previously successful chiropractic inserts. For only $375, chiropractors can print 10,000 full-color, glossy newspaper inserts. That’s less than $0.04 each!
http://www.taradel.com/practicegrowth
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