There it is, the burning question that most chiropractic students and doctors wanting to open a practice are asking themselves. The answer my friend may surprise most of you.
In this economic climate, it is impossible to secure financing for your new practice.
That is completely true, if you choose to believe it.
Have you’ve ever written anything? If you’ve made it to Chiropractic School you have at some point, and you know how professors will hammer you for not sighting your sources. Plagiarizing can cost you your diploma or career if you publish someone else’s research as your own.
The great thing when starting your new chiropractic office is that copying a success is not only accepted it is one of the smartest moves you can make! Don’t reinvent the wheel! Learn from the successes and failures of others, so you can avoid the pitfalls and errors others have experienced.
What’s the best business structure for a new Chiropractic Practice? That depends on the amount of taxes you want to pay.
**Disclaimer time, I’m no CPA or Attorney so blah, blah, blah do your own research**
I’m here to get you to think, not be your CPA. So let’s keep this simple.
Here are your most common options for business structure:
I strongly suggest doing your home work. Here’s a couple places to start:, My New Company, Incorporate Time & Legal Zoom. Now they’ll all try to sell you something, but they give good information and compares strengths and weakness for you.
You never want to evade taxes, that leads to jail. What you do want to do is minimize your tax liability while using the tax codes the way they were designed, which actually contain many benefits the small business owner.
One of the biggest problems for the new doctors I work with is that they become so successful so fast that their CPAs rarely plan for their income the first year. Then they get whacked with huge tax bills that they were not prepared for, and nearly go bankrupt while having a hugely successful practice. I speak from experience, we got slapped with over a 30K tax bill my first year, all my accountant said was “oops, I didn’t expect you to do so well your first year” My intention is not to bash the accountants, we need them, but please be sure to find a wealthy one that utilizes and understands the chiropractic profession as well as corporate structures. Had I been structured properly, my tax burden would have been 10-15K that first year. There you go, I may have just saved you close to 20K with this post alone.
Question: Who do you need on your “power team” to help you set up your business? Go find them now!
If you need some help on this, I have some great suggestions for you!
I talk with chiropractic students and doctors from all over the country looking to open their offices. Without fail there are always a couple of questions they always asked about how to get their financing:
Now, two or three years ago the economic climate was significantly different than today. So, my recommendations on this subject have evolved and changed accordingly.
What kind of business plan do I need?
It’s simple, a great one. In years past, a good credit score and a logical plan was enough. Today traditional lenders have changed the rules. No longer does a good credit score account for much, even a better than average score doesn’t pull the weight it use to. As a rule, chiropractic students coming out of school are over leveraged and undercapitalized which makes it challenging to get any kind traditional financing. In order to have a shot with a lender today, you must take your business plan very seriously. It’s going to take more than the mock one you put together in your stellar business class in Chiropractic College. One surprising source for small businesses is actually the SBA, there are templates and some great information there for you. Your business plan must be professional and presented that way, or lenders stop listening very quickly.
Where do I find financing?
The true answer is anywhere you can! If you picked up the tone from the last question, it’s very difficult to secure traditional financing for a small business start up, let alone a chiropractic practice. Now is the time to start thinking of other sources for your startup capital. As students it means minimizing expense increasing savings, part time jobs, conserving those student loans, family contacts, building equity in homes, etc. If you put together a proper business plan it then becomes much easier to go to non-traditional lenders. With a thorough plan, asking friends or family for financing becomes much easier. Believe it or not, there is still plenty of dollars out there to get your chiropractic office open, it just takes more effort , determination and a don’t quit attitude.
Recently I heard the story of the publishing of Chicken Soup for the Soul. Jack Canfield went to 35 or so publishers, who said no, but it only took one to say yes, and you know the rest of the story.
Don’t Ever Quit!
Question: Are you a currently working on your plan to finance your dream?
“If you do what you ought to do when you ought to do it, there will come a time when you can do what you want to do when you want to do it” – Zig Ziggler
B.J. Palmer was quoted as saying something like; Drive until you run out of gas, chop down a tree, build yourself a table and you’ll be successful in practice. Unfortunately that concept only works if you run out of gas in a good market and have a truck full of power tools. All too often chiropractic students and doctors starting a new practice use similar demographic research. The results: well put it this way, no other health profession comes close to matching the student loan default rate of chiropractic. Now, don’t be frightened by that statement. I take that back, you should be very alarmed by that. Quite honestly, you’re only going to get one shot at opening a successful chiropractic office, so you better do your home work and get some help. Opening an office and starting a new life tends to be a very emotional decision no matter what the demographics show New energetic doctors think, “I can make it anywhere” and “I’m going where I want to go, no matter if its a good market or not”(that’s what I told myself).
Here are 4 principles when deciding where to open a Chiropractic Office:
1. Do your Homework
This goes way beyond just finding out how many Docs are in town and comparing to how many folks live there, although that’s an important thing to know. I could spend all day talking about this, but I’ve found a great site for demographic research called Locus, its specific for D.C.s and some of your colleges have access already paid for you to use it. Geography is also important to look at. If your practice is on the coast, not many folks are coming off ships to see you; thus your drawing area is cut in half. You really need to get out there and smell these towns to get the feel for them.
2. Take emotion out of the equation
Think of it this way. Let’s say you’re opening a Subway sub shop and you borrowed 150K and invested in the franchise. You then found a location for the store and laid down another 80K for build out, opening marketing and other opening expenses. That’s over 230K invested. Would you go back to your small hometown (emotional), with 3 subways already there (less than optimal demographics), and expect your friends and family to drive in enough business to compete and succeed with an overabundance of well established competitors? Of course not. By the way, who will always be wanting the free food…hum, friends and family. You will have close to those numbers invested in your profession, and you need to treat it that way.
3. Be careful who you listen to.
What I mean by that is there are a lot of struggling doctors in poor markets looking for chiropractic students to come in as associates to help salvage their practices or pawn their problems off to new doctors looking for a shot in practice. My intention is not bash all chiropractors that are looking for associates or a buyout, but there is a percentage of docs looking to take advantage of your inexperience. Like the old saying says, if it seems too good to be true… In those situations take a step back and look closely at the details and the true intentions of the other party.
4. Location, Location, Location.
Isn’t that the mantra of every real estate agent you’ve ever met? Having the proper market and building are absolutely essential to success. What most chiropractic students and new docs don’t realize is that the prime real estate on the main drag next to Wal-mart and Walgreens is not necessary for a chiropractic office. Your rent and property costs are too great, especially when starting up, signage costs are huge in order to compete and stand out with everyone else, and most times it’s a pain to get in and out of the parking lot, which often has limited spots. When your goal is to help as many people as you can, it’s very frustrating to lose patients because it’s inconvenient for them.
Be Blessed
Question: Is where you want to open your chiropractic practice a good or a great market? Are you Sure?
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