EPISODE 396: Services I'm Supporting

Hey, chiropractors. We're ready for another Modern Chiropractic Marketing Show with Dr. Kevin Christie, where we discuss the latest in marketing strategies, contact marketing, direct response marketing, and business development with some of the leading experts in the industry. 

Dr. Kevin Christie: [00:00:00] Hey Docs, welcome to another episode of Modern Chiropractic Mastery. Today I'm bringing you a solo episode and we're going to discuss the realities of chiropractic revenue. I always find it interesting sometimes it's posted in in Facebook groups, sometimes ours, about certain revenues and numbers and there's a lot of misconceptions around it.

There's a lot of misunderstandings of it. Sometimes if you Here are a big number thrown out. Some people think they must be doing something unethical to, to get there. Uh, I've talked to enough chiropractors, uh, that of all stripes in, and there's a lot of chiropractors doing really well and they're doing it the right way.

Um, and really well as a very, um, it's a relative term, right? I could have a practice that's doing a hundred thousand a month in revenue and having cashflow issues. I have a practice that's doing 15, 000 a month. It has cashflow confidence. Maybe they're living a simpler life. Maybe they don't have kids or family yet.

They're younger, [00:01:00] uh, lower overhead. Maybe they're in, you know, Wyoming instead of, um, California. There's a lot of variables to it. So there's no one size fits all. And I do love the, kind of the, the quote from Westgate that is, uh, volume is vanity. Profit is sanity and cash is reality. So we're not here to have is like volume.

Discussion right where it's like, Oh, how many patients you see in a month? But yeah, there is obviously a correlation You know, if you if you see 200 people in a week, you're going to probably Have more revenue than someone that's seeing 50 in a week, but there could be overhead as well But I think there's a lot of misconceptions on what is good revenue for a business, right?

Like if you really think about it, what would it take in a given year of revenue to pay yourself a professional wage? Let's call it a hundred thousand dollars a year. But a lot of you are going to want more than that, right? If it, depending on [00:02:00] again, where you live, if your spouse works or not, things of that nature, but.

It's expensive now if you end up being 35 40 45 years old It's like you may want to make 200 000 a year. There's nothing wrong with that, right? You're a doctor and um, So, you know you think about that like if you wanted to make 200 000 a year Which is well within your right and you should want that and that's a professional wage It doesn't have to be that much but that like it's okay to want that But like what would it take for you to to make 200 000 a year in your clinic's revenue?

Because typically to make 200, 000 a year, um, you're going to need, you know, a team, you're going to need some, uh, nice office space. You're going to, you're, you're going to have to generate revenue to get there. And you know, 200, 000, even if you were really on the lucky side of it and you got to keep 50%. Of what you made, which doesn't always happen.

A lot of people throw that [00:03:00] around and there's always that game of like, Oh, well I got 60%, uh, you know, or 40 percent is my overhead and it's super low overhead. But the problem with super low overhead sometimes is it does limit your ability. to actually generate absolute dollars. And so the, uh, uh, chiropractor owner of a big practice might only bring home 30%, but 30 percent of a million dollars in a year.

Is 300, 000. That's really good. 60 percent of 200, 000 is not as good as 30 percent of a million, right? It's that saying is like, I'd rather have 10 percent of a watermelon than 50 percent of a grape. And that's some of the things that we see sometimes with practices. That sometimes we see is like, uh, the doctor has a high percentage of what they take home.

You know, they're [00:04:00] taking home 50%. But they've designed it as such as that they don't have enough revenue for their actual take home number to be a healthy number.

And so it gets tricky when you, you try to tease that out, but, um, you know, you, you ultimately want to be able to pay yourself a professional living. So let's go back to my example. If you wanted to pay yourself 200, 000. And you're on the great side of things and you're actually able to take 50 percent home.

That's 400, 000 a month that you would want to have as, as collections. And if I do the math on that, right, that's going to be about 33, 000 a month in revenue to get to that 400, 000. And that's, that's allowing you to do it. Now, a lot of you are in higher overhead, right? So if, if I had to guess. A lot of you, if you, you could even do things like [00:05:00] look at, if you look at the profit first model and I'm going to, the, the, the, the substance of this podcast today is going to be me reading a blog I wrote about why it's so important to get to at least 30, 000 a month in practice for most people.

And I'll have some caveats to that, but I even share on here, the profit first model. And if you look at the profit first model, which a lot of chiropractors do, Uh, are utilizing because it's, it's a really nice model. He's got a great little, uh, chart here, the taps, which is your target allocation percentages.

And if you get to that, uh, 30, 000 a month or 360, you're in his column B and it says here owner's pay is 35 percent plus your profit is 10%. So if you were to add those two up, you get to say 45%. You're taking home 45 percent of that. So if I said, okay, we're gonna do 360, 000. In a, in a year and we, we times [00:06:00] that by 0.

45, that's 162, 000 at your, uh, that is essentially your owner's comp, we'll call it. That's good. We're liking that, right? That's pretty good. But if you get into the column C, Which is revenue of 500 to a million, the owner's pay goes down to 20 percent and the profit goes up to 15 percent because typically as revenue increases, the percentage that the owner takes goes down because it takes more overhead to create that revenue.

It's just, it's just business. But that percentage being lower is obviously is, is nice. Okay. It's because you've got more money coming in. If I gave you a 10 million practice and you got 10 percent of that, like that's a million bucks. That's good. Cause a lot of times you can't get to 10 million unless you have considerable overhead.

That's why the percentages for the owner's pay, Timberley goes down as the revenue goes up. And what we're seeing is that just too many chiropractors. [00:07:00] Are not getting the, to certain revenue numbers to build a team and to have a practice that grows and to be able to hire an associate and they get, they get frustrated with that and they, they don't realize that it takes real revenue to get there.

Like it takes practices making 350, a million to, to be able to get there. And a lot of times. I find it's hard for a chiropractor to take home 200, 000 a year in comp. You know, you might run your car through, whatever you do with it, like, but count that as comp. It's hard to get 200, 000 a year in income, like taking home.

Pre tax, without getting revenues up to like 500, 000, uh, 525, 550, 450. It's, it's hard because if you try to keep things so low overhead, it's harder than [00:08:00] generate. enough revenue. And so sometimes people run into this, um, tug of war battle where they're happy that their overhead is really low. And a lot of times it's good, especially when you're starting out, but long term they're like really, they'll brag about the overhead being low, but that low overhead is preventing them from generating enough revenue to actually pay themselves enough.

And so they're stuck. And I see a lot of clinics where they're, their clinic revenue for the year. is 200, 000 a year for like a long period of time. And so obviously if you're, um, if your clinic is 200, 000, you may not ever get to that 100, 125, 150. Obviously you're not going to get to 200 as far as your take home pay if you're out there.

So one of the realities is that sometimes it takes overhead. It takes investing in team and equipment and certain things to get that revenue up, but [00:09:00] there's an ROI on it. So maybe for every dollar you spend, you're getting two. And that's how business works essentially. And that's why I think, you know, 30, 000 a month is so important to get to it.

You know, if you keep your overhead low and you're in, you want to keep things simple and you like that, and you're in certain areas, it's It might be 25, 000. You know, if you're in San Francisco, it probably is 35, 000. Uh, but you get the idea. So I don't want you to get married to the 30 K number, uh, but there's a blog.

You can go to our website, modern chiropractic marketing. com. You can read the blog. It's under our blog section. It was from June 1st. Of of 2023 and uh, i'm just going to read this to you and we'll go from there I'm not going to dissect the charts out here. I've got a chart. I Reference a lot of stuff in here from profit first and also greg crabtree.

So here you go having the luxury of speaking with and coaching many evidence informed chiropractors of all levels has provided me with some great insights into the struggles and opportunities [00:10:00] of the patient centered chiropractor. I've realized that the 30k month average collections is a vital goal to reach as a practice.

As a patient centered chiropractor, I know you aren't trying to make this all about finances, you're trying But let me explain why this is so important and why we are having coaching calls with our members on this, uh, pretty consistently. A practice that can have adequate revenues and profits will be able to, one, provide an excellent patient experience, two, you the doctor won't be stressing about finances and can fully engage with your patients.

Three, you can afford to hire an A team, better equipment, you'll have better space, prevent burnout because you have a team helping you and allowing you to function in your unique ability. You'll be able to potentially offer better services and then you can soon hire an associate to free you up even more and you can start doing the things that really, again, like are in your unique ability and have a little bit more of a freedom of, of time.

All right. Um, so that's it. So [00:11:00] let me continue to read. Let's do a 30, 000 foot overview of the finances. This level of practice, the 30 K isn't an exact number, but you get the point. It could be 28 K in Nebraska, and it may be 35 to 40 K in San Francisco, but I have seen the 30 K number be on point in most scenarios.

I want to take two financial frameworks discussed on our podcast and virtual summits before profit first bottle by Michael Michalowicz. And Simple Numbers 2. 0 by Greg Crabtree. I recommend both of those. Uh, there's books that you can read on that. And then I have two podcast episodes that you can gain more clarity on there.

You can look at that. And that was with Holly Tucker, who is a chiropractor that is probably first trained. And then also I did interview Greg Crabtree. So I dive in, I'm not going to. Read this here part, but I dive into the profit first target allocations that I want you to look through on this blog and, and go from there, but under column B, cause that's what the 30, 30, 000 a month [00:12:00] would fall under.

That's 300, sorry, 360, 000 a year revenue. The 35 percent owners pay in the. 30 K per month scenarios will give you about 10 K month in income, not counting your 10 percent profits. For the sake of this scenario, let's place your payroll taxes for your, your W2 pay within the 35 percent owner's comp. You'll want to seek professional guidance on all things taxes.

And I recommend, uh, that you, you do that. The 10 percent profit will be about 3000 per month. So you've got on your owner's comp. 10, 000 and in your 10 percent profit, you got another 3, 000. That now leaves about 17, 000 for taxes and operating expenses. So we've subtracted 13, 000 from the 30, 000 and you're left with 17, 000.

Let's remove the taxes. And it could be, uh, less than 15 percent from what McCallow says up here at 15%, but you will just remove [00:13:00] that about 4, 500. Uh, so that leaves you 12, 500 for operating expenses. And again, it could be, you could have a little bit more, but just for the sake of this, Now let's discuss the ideal core team.

In my opinion, adding to this core team will be the next goal. When you consistently hit the 30, 000 a month average, you've got the ideal team here is the doctor owner. That's you and in the rockstar front desk, and then the Swiss army knife chiropractic rehab assistant were just a fully involved preceptorship program.

But I do think a great core team is the doctor, the front desk and a Swiss army knife, uh, CA essentially. Okay, now we're going to transition to Greg Crabtree's 2. 0 concept, which they have researched heavily amongst thousands of small businesses. The main concept is that your overall labor costs, including payroll, payroll taxes, employee benefits, and 1099s that service your [00:14:00] business.

should be half of your total revenue. Divide 360k by your overall labor costs, which would be the 2. 0, and that's what you want to come up with. So in the 360k practice, your overall labor costs should be about 170 to 190, 000 per year, or 14 to 16k per month.

If you are taking 10k of that, That leaves you 6K for more labor costs. It also leaves about 6, 500 for other expenses such as rent, utilities, marketing, medical, and office supplies. 6K for the cost of a front desk and a CA could be a tight squeeze depending on your locations, but you could consider a few ways to make it happen.

A well developed preceptorship program could replace the CA position. You could choose to pay yourself a one to two [00:15:00] K per month less to afford both the front desk and CA for a bit. And then that CA will allow you to make a purchase. And if you want, the full 25 percent or 25 percent of the taxpayer revenue, you may, you could opt for a part time CA or one that only works your patient facing hours, and maybe your accountant or profit first specialist determines you only need 10 percent of revenue.

Tucked away for, for taxes, not 15%. That percentage could go towards your operating expenses and your CA. So knowing your numbers, making accurate growth decisions and setting realistic goals get you from being a lone wolf. To having a team based practice. It isn't easy and doesn't happen overnight, but it surely can happen.

But when you get there, you have a practice with a great team, healthy profits to grow with, and a wonderful patient experience, and you can avoid burnout. This great team and healthy profits will launch you into the next phase of growth. [00:16:00] That may include hiring an associate, adding big ticket services, such as shockwave buying or leasing a bigger office space and much more.

There are many variables that tease out for your practice and more importantly, how to get there. We are doing that consistently with our, with our clients. Some of the variables that you want to consider. Or what do you need to, you know, like what numbers do you need to see? How many office visits in a month would equal that revenue?

30, 000, right? Um, who, who do you hire first? And when what's your vision strategy to get there? Are you doing a good job of patient adherence? What's your marketing looking like? How are you developing as a leader? And do you have a remarkable patient experience? All right. And that's the end of the blog there.

You can read that again, go to our website, modern chiropractic, marketing. com to. To check that out, but that's going to give you a really good breakdown of why it's [00:17:00] important. It's not just like a number because we made up a number and we're not, it's not a vanity thing. It's just, we want to build a team and you need to be able to, to do that so that you can do this profession for 40 years and feel good about it.

And ultimately that's why, you know, we're, we're developing an online course. This is going to be a six week online course, all centered around. This 30 K a month and how you can get there. Uh, we're going to launch this on December 2nd. The first lesson will come out, um, in the month of November, up until November 15th, you'll have an early bird discount after November 15th, up until December 2nd, because it will close.

We're going to close it at December 2nd and then actually launch the cohort. Um, you'll be able to sign up in November and join this cohort. That's going to work towards getting the 30, 000 a month. That's going to be six. weekly lessons. There'll be a, it'll [00:18:00] release for that week. And then the following Monday, we'll have a group coaching call around it for asking questions, talking about particular topics.

And we'll also, uh, you could pre submit if you can't, we'll record it, get it to you if you can't make that a group call, but you'll get all that there. And this is going to be actionable stuff, right? It's going to be a lesson that's going to. not just be theoretical is going to actually lay out, um, different steps within these six weeks.

And then you're going to have homework to do. You're going to have action items to take, and you're going to get super clear on what it looks like for your clinic to get to 30, 000. And, you know, you'll give yourself a reasonable timeframe. You know, if you're at 25, 000 and you just can't, seem to get up there, then it might be pretty quick for you.

If you do this course, if you're at 15, maybe it's two years out, three years out. I don't know. Uh, we'll get clear that we're going to, we're going to have a really clear vision strategy around this for you, but you're going to have actionable steps. And [00:19:00] if you actually do the work and it's all going to, you know, you know, how we roll here, it's going to be ethical and elegant and first rate stuff as far as what we're expecting you to do.

We're not going to be having you go, it's like the uber ECO Like, Oh, sell 4, 000 care plans. It'll be easy or a six month care plans. It'll be easy. We're going to do this without you having to feel salesy and we're going to help you develop as a leader, get super clear on the numbers it takes to get there and, and start thinking about why that's important and then show you how to lay out.

Okay. What is your next team member hire? How's that hire? I'm going to help you get to another, uh, revenue level and things like that. And so if you're interested in that, you can sign up now. It's open to sign up and that's going to be at, uh, bit. ly. So B I T dot L Y four slash MCM 30 K. It will be in the show notes.

If you're in our Facebook group, like I'm, I'm going to promote this. Like I don't, you know, I'm going to really promote this. Push this hard because I think a lot of [00:20:00] chiropractors need it. And it's going to be the best money you're going to spend. And I don't speak in hyperbole, but I'm going to push this.

So you'll be able to find it. I'm going to email. I'm going to, uh, I'm going to post it in our Facebook group, modern carbon marketing. You're going to see it. You're going to see it often in the month of November to sign up, check the show notes out again. It's a HTTPS colon forward slash forward slash.

bit. ly bit. ly forward slash MCM 30 K number 30 letter K to sign up for that. And, and you're going to make that commitment to really develop a practice. That's got the revenues to be able to take you to the next step. Now, some of you are. Hopefully you didn't turn it off when you heard 30k because maybe you're at 50k a month already.

If you're above the 30k already, then you could still do this. You're just going to do a different number. Like, let's say you've been at 35, 000, uh, pretty consistently and you want to get to [00:21:00] 45, 000, right? Whatever the number is. The stuff you're going to learn in this course is going to help you get there.

You're just going to have different numbers. Okay, but a lot of I talked to a lot of chiropractors And again, there's nothing wrong with being under 30 and you might be at 18 000 a month in Pigging shit and your love in life. That's awesome But I know a lot of chiropractors that want more for their practice need more to to create To fulfill the vision they created and we're going to help you do this in a six week course That's going to have a lot of actionable items homework and resources for you, but it's not going to overwhelm you Um, and it's not going to like, you're not going to after six weeks have the 30, 000 a month revenue, but you're going to have a very clear plan and start taking all the action steps to get there.

Okay. So go to bit. ly bit. ly forward slash MCM 30 K. And, uh, I'm looking forward to working with you. If you sign up, I I'm very confident in this [00:22:00] again, if you do the work and you might need a mindset reshift as well, and just start to realize, like, I got to get out of my own way and we'll talk a little bit about that, but it's not going to be a, a theoretical mindset, motivational coaching six weeks.

Okay. We'll touch on it a little bit, but we're going to actually give you, um, real things to do in your practice.