Dr. Jeremy Brubaker

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:

• Sole Proprietor – All income taxed @ highest rate & self employment tax (earned income)
• LLC,LLP – Layer of personal liability, Flow through and taxed like sole proprietor (earned income)
• C-corp. – Benefits larger companies, more write offs, fringe benefits,   Taxes more complex and dual tax
• S-corp. – Flow through entity, friendly to use but requires organization, but much more tax friendly

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:

• What kind of business plan do I need?
• Where do I find 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?

Where do I start? The all consuming, burning question of all fledgling Chiropractors. Our generation is hoping that apple may have an app for that coming out. After speaking and listening to you, the future of our profession, voice your fears about starting a chiropractic practice, it is horribly apparent that no one is addressing your concerns.

Just go, Google, and try to find good information on starting a chiropractic practice. Aside from a few student forums, several periodic articles and some sites by disgruntled MD’s and DC’s bashing our great profession, there doesn’t seem to be many content rich sites out there for us.

Now there are several companies that put out information such as dynamic chiropractic and Chiro-Economics which often have good content occasionally on this subject, but it’s truly a challenge to find trust worthy materials on a consistent basis.

In the past I’ve stated my love for this profession and how the future of it depends on you! While practicing chiropractic you get to see the true results and the impact the doctor of chiropractic makes to patients lives and their futures, (the exact reason you are in college). If we continue to graduate boat loads of Chiropractors and not equip them for the realities of small business management and productivity, we’ll will continue to see the 82 or so percent of practicing D.C.’s struggle to pay their bills. That my friends, is not making an impact on peoples’ lives or preserving our profession. Helping new doctors succeed what drives me to take the time to give you this blog. Let’s get to some meat and tators.

Here are some of the things I wish someone would have taken time and talk with me about in Chiropractic College. No one did it for me, so let me do it for you.

TOP 10 THINGS I WISH I’D KNOWN IN SCHOOL

10. Where I’m going to practice?
- Is it a good market, (what is a market?)
- Location in market

9. Business Plan
- How am I going to start?
- Plans & Goals for my practice
- How to write an effective business plan

8. Financing
- How to get a bank to loan money
- Why good credit matters
- How to fix my credit while still in school

7. What’s the best business structure?
- LLC, SUB – S, Sole Prop.
- Which is the most tax friendly

6. What do I need to look for actual building?
- Stand alone or strip mall
- Layout, patient flow
- Permits, leases, equipment
- Buy vs. lease

5. How is office going to run
- Office protocol
- Patient flow
- When, where
- Don’t shoot from hip

4. Staff – manage staff
- Need Staff – the most important part of practice
- Great Doctor, poor staff, poor practice
- Hire, fire, pay, motivate
- Referrals to office

3. Marketing – where are patients coming from
- Newspaper, screenings, yellow pages, TV, mailers
- What is effective, getting folks to your office for help

2. Insurance – Taboo, don’t talk a lot about in school
- Know the rules, how to play
- Every state is different
- How to teach someone else how to deal with them
- How to get paid if you want to stay in practice

I don’t want to overwhelm you, but when you get out of school, it’s flat out overwhelming.

…..and the No. 1 thing I wish I’d know when I was sitting in your shoes..

1. There are people out there who want to help you.
- Other docs, mentors, visit/observe them… Read their blogs!
- Professors @ Chiro School: Great resource when in practice as well
- Management groups
i. Good ones, Great ones, and ones to run from
ii. Who’s there to help and who’s there just to make money
(When I was in school I thought they were all out for $)

We are going to explore each of these over the next few posts! Believe it or not from just reading this list you will be further ahead of where I was while sitting in student clinic.

Question: What area are you in need of knowledge, and what do you plan to do about it?

Making your way through Chiropractic College, the furthest any of us typically see ahead of us is tomorrow. Our thoughts are constantly, what do I need to study, which tests are coming up and how am I going to stay awake during microbiology. Although there are always a few exceptions, most early quarter/tri chiropractic students are all thinking the same type things. I’m ashamed to say, I too was busy memorizing and regurgitating facts and physiological functions and not asking the right questions. During college there will always be guest speakers coming on campus, preaching this and selling that. There’s one or two that years later I still remember. Dr. Guy Riekeman, now the president of Life was talking about knowing what you know, knowing what you don’t know, and not even knowing that you don’t know. Love or hate Dr. Riekeman, the man makes you think and ask questions. Therein lies one of the greatest pieces of advice I was given as a chiropractic students…Ask questions.

Don’t act like you know it all when you don’t!

My favorite book often speaks about the power of humility and the knowledge that follows. That’s a tough sell for educated and motivated new Doctors. Not even knowing that you don’t know is what us as students should be most ashamed of. It’s typically not until after graduation and staring student loan repayments in the eye that the real questions start to fly:

* Is a strip mall next to chucky cheese a good location for a chiropractic practice?
* Why is a commercial lease so expensive?
* Can lottery winnings be used as start up cash?
* Where’s the express Medicare application?
* Is a NIP Number important?
* And the most important question, should I wear sneakers or sandals in the office?

Now if haven’t begun asking yourself these sort of things, well…It’s time to expand those concepts and jump out of your box of knowledge into another realm.

Oh, by the way…the answers.

* No, not a good idea next to Chucky
* EVERYTHING commercial is ridiculously expensive
* Yes, you can use lottery winnings as start up cash (But you’ll need to be struck by lightning 7times before that happens)
* There’s NOTHING express when dealing with Medicare
* Yes, it’s important and it’s a NPI number (not NIP, that’s something completely different)
* Neither, I find Bass Shoes the most comfortable and cost effective dress shoes (clearance rack of course).

Whew, glad we got that straight!

It would be great to say that chiropractic students looking to start a chiropractic practice are asking even silly questions like these early in Chiropractic College. Reality is that it’s fast and furious, by the seat of your pants toward and after graduation (At least it was for me). By the time that last quarter/tri rolls around most students are too ashamed to admit that the need help and to fearful to ask dumb questions. For me, I didn’t know who to trust.

The greatest thing about this blog is… who cares if it’s a dumb question; Lord knows I should have asked a heap of them prior to signing the lease for my chiropractic practice. If you agree to be honest with yourself and not kid yourself, I’ll agree to field your concerns, fears and questions with real life success. Now let’s have it.

Question: What are you scared or embarrassed ask?

“Your potential greatly exceeds your concepts of today” – Thomas A. Owen III

Let’s just get real and not kid ourselves here. All doctors especially myself, coming out of school tend to know more about everything than anyone who has ever been in this profession before. Personally, I’m the biggest do it yourselfer ever. There’s nothing I won’t try to do myself, and when I think I know something about it, no one can do it better. Although confidence is an essential part of being a leader, and all health care providers need to be one, there comes a time when confidence becomes ignorance and then you learn those valuable and often painful lessons (you wish you never had to learn). The most difficult part for me is then admitting that someone, particularly my parents, may have been right about something. Now I’ll never admit on record, and you can’t make me admit, that I was wrong and they potentially may have been correct. We’ve all been in that position at some point.

Now, there are several things that I absolutely love in life. Number one is the Lord and our Savior, number two is my family (my awesome wife, my best buddy (my 5 year old son) and of course Jake the dog). Number three is Chiropractic, every facet of chiropractic. The process of opening my office was a blast, sheet rock, paint, leases, equipment, marketing (did I mention I’m a do-it-yourselfer). Day to day patient care and the bodies healing ability is absolutely amazing to experience. The business end of the practice is also a favorite of mine, managing the nuts and bolts and actually earning a profit from serving others is incredible. There is no reason that every student coming out of school can’t achieve the success we’ve found in chiropractic.

The one thing that did hold me back and delay the opening of my chiropractic practice for a year was my absolute Ignorance of what awaited me after the stroll across the stage at graduation. Our office has always been open for other doctors (even the guy down the street) and we love students to come and observe ask the questions I should have asked before throwing my cap in the air. The problem with answering doctors and student question that way is that you would have to come to my office for the information, and Pennsylvania in the winter time…well some folks like it.

Have you tried to find answers and information about opening a successful chiropractic office, or any helpful information for a chiropractic student without someone trying to sell you something? I know I didn’t and haven’t found any up to date other than one or two articles from the ACA or a chiropractic periodical. With National health care staring us in the face, if we don’t come equipped out of school ready and willing to make our mark, we as professions are in trouble! No pressure… students! If any there was a time for the next generation to step up this is it baby.

It is my hope that this blog will be for you, what I was dying for as a student. I’ll never claim to be an all knowing resource; even I am not that Ignorant to think I know it all. One thing I’ve learned is to ask those who have gone before me and learn from their failures and triumphs so that I reach my goals as quickly as possible without the costly regrets and errors they have made. I read a quote one time from Dr. Jim Saeli that said “Success leaves a path…Follow it”. Every new grad does not need to and shouldn’t have reinvent the wheel. This blog is an opportunity for you to interact and ask questions of someone who has been there and has succeeded. I love this profession and do not want to see the next generation of chiropractors fail simply because they didn’t have an opportunity to ask questions and find the resources necessary for success. Asking even dumb questions, is better than the being the ignorant know it all chiropractor, using my original method of trial and error.

Question: What is the most important questions that chiropractic students never ask?

p.s. You only get one life to be happy and make a difference, don’t waste it!