EPISODE 355: The Business Potpourri Show

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 solo episode of modern chiropractic mastery today. I'm bringing you the business potpourri show. We did a marketing one, uh, a month or two ago, and just some questions that come up, you know, coaching calls, masterminds, Facebook groups, uh, people have good questions or topics.

And I wanted to touch on about six of them, uh, six or seven of them today. And, uh, just a little, little nuggets of things, a little, you know, one's a tip. We'll start right out. Um, Darcy Sullivan, who is our resident SEO. expert talked about how Google hours now plays a role in Google search. And, uh, for instance, .

If someone were to Google chiropractor near me or something, some derivative of that. And it was 5 p. m. on Tuesday and you close that one o'clock, they're going to direct to chiropractic offices that are open at five o'clock on Tuesday at that time that they are searching. [00:01:00] So not a lot you can do about that.

You know, your hours are your hours, but if you have very limited hours, it could impact your Google search. You can't. You can't really finagle that in any way, but just wanted to give you a little update on, on that. And we do have a, another episode coming up in a month or two with Darcy on all things new with Google and SEO.

So right out of the gates wanted to touch on that. Another topic we've been diving a lot into, and it is that 2. 0 number from Greg Crabtree for references. You can. You can look at our past catalog and we've had him on the episode and we dove into this. He's kind enough to do a two hour training for our mastermind group come in February.

It's a zoom training and we're going to really dive into business financials even more there. But the 2. 0 number is, you know, his whole thing is simple numbers 2. 0. It's kind of the theme of his two books. And it's your [00:02:00] overall labor costs. I'm going to keep it simple as it pertains to this, and you can definitely reference the podcast I had with him or read his book, but essentially . Your 2. 0 number, your overall labor cost is going to be a math situation. I'm just going to use easy, easy numbers. Let's say your, your revenue for a year in your business is 500, you 500, 000, you would divide your overall labor costs. And I'll break that down in a second to get that number.

And so to be around 2. 0, he says 1. 9 to 2. 1, but For the sake of argument 2. 0, that means your overall labor costs should be about 250, 000 a year. Right? So that's the math. 500, 000 divided by 250, 000 is 2. 0. So to have a business, a chiropractic practice, and this is all businesses, but for the sake of our topic, to have a chiropractic practice, if your revenue is [00:03:00] 500, 000, it should be about 250, 250, 000 in overall labor costs.

If it's too high, you're going to be, it's going to be hard for you to be profitable. Like you should be. We know a lot of very busy high revenue clinics that do not have the profits that it should, and they could be. payroll heavy on the flip side. If you're very payroll light, you might be running your team hot.

You might be burning out your employees and you don't have enough team to sustain the business that you have. And so you've got to be careful on that direction. As well, overall labor costs is going to be your payroll, uh, your, you know, your, your employer's taxes. If you've got benefits for them, all those, you know, if it's, if you match the 401k, uh, your pay, not your profit distribution, but what you do pay yourself and.

One of the things he talks about is you need to pay yourself a competitive, uh, salary of what it would cost to have a, a [00:04:00] chiropractor run your practice without you. If you weren't treating patients, what would that be about? And that would be your overall labor costs. Now, recommend if you know, if you outsource your billing instead of having it in house, you probably want to put that number in there as well.

If you have some independent contractors doing work for your business, not just your associate, your chiropractic independent contractor that we think of. But if you're You know, if you're using a virtual assistant for some things in the office, or if you've got a social media person and you're paying them X amount per month, that is labor.

And that would count into your overall labor costs. Okay. So that is that 2. 0 number. I wrote a blog on it and go to modern chiropractic marketing. com. And in that, uh, why the 30, 000 per month. Revenue practice is so important. Uh, that's the title in there. I break down this 2. 0 and I also break down a profit first, but the 2.

0 number is very easy to, to, um, grasp. [00:05:00] And so many people are confused about business financials. I think if you read that blog, I referenced on our website, you'll get, you'll start to get a picture of how this all works, like, how do I. fit in my payroll costs with my other expenses. And what should I have as profit?

And you know, how much emergency savings should I have? And things like that. What like this blog and what Greg Crabtree talks about in, on the podcast episode I had with him or in his books can really help you develop. a strong and healthy practice and financially speaking.

Next little topic is it's been our Facebook a few times recently. There is a lot of Facebook scams going on. You're getting, everybody's getting these damn direct messages about your account. It's going to be shut down. It's all this crazy stuff. Those are scams. Ignore it. I highly recommend going into our Facebook [00:06:00] And Josh Satterly was kind enough to, I think, comment on one of the posts or posts in there. You can kind of search his name in there and he has a way of where you can rectify that. So check that out. It's a lot easier for you to look at what he posted versus me trying to explain it because he has a nice little image that shows what you need to do.

So check that out if you're getting those, which it seems like at this point everybody's getting it. All right. Next topic. The, there's a post recently and it's been something I've harped on. A handful of times and that is the, the chiropractor, the rehab chiropractor that's doing 60 minutes sessions one on one and I have nothing against you.

At all, other than I'm trying to help you make a legitimate business out of that model, because it's, it's an uphill battle. Um, what ends up happening? It's it, it becomes, and I've talked to chiropractors. I used to do a [00:07:00] lot more rehab, a lot more time with patients when I was 28, 30 years old, at some point.

You're going to be 45, you're going to be 50. It's really hard to be spending one hour with a patient as a lone wolf, just you and not having a team around you. And my concern. Is that too many of the rehab chiropractors are doing 30 to 60 minutes sessions are not charging enough or they're applying the wrong financial compensation model to it.

They're trying to run an insurance or their cash rates are not high enough and you have a very hard time ever getting out of that 1 on 1 and it. And it looks cool and it gets good results and it seems fun, but it's hard to avoid burnout in doing that model without a team around you for 15, years of doing it.

We need to have a path [00:08:00] to have a team around you, for you to focus on your unique ability and. Even if like, if I give you an example and you're doing 60 minute, uh, visits with one, you know, you'll see physical therapists do 60 minutes, but they're usually doing three or four, uh, for good or for bad, but obviously it's just like personal training.

Like you see a lot of training, go to group training. There's a reason why trainers have gone to group training because it becomes a numbers game and the financial math. works to have a group class in fitness. The financial math works for physical therapists to see two to four people in an hour and charge appropriately.

And their insurance model tends to, I can't say it across the board and every state and every plan, but it tends to compensate appropriately, uh, for that. So that physical therapist might have a 500 per hour. capacity. They can see four people. They're getting reimbursed 100, 125 a visit. [00:09:00] And that math works for the rehab chiropractor.

That's doing one on one for an hour. Um, if I asked you what's a high cash rate for that, someone might say 175. And many of you aren't even charging that much, but On the surface, 175 seems like a good amount, but with inflation, cost of, uh, running a business, cost of your personal lives, cost of everything going up, being only able to make 175 an hour may seem okay if you're a lone wolf.

But it really gets tricky if you start to want to expand into a bigger office and more rent to have a front desk person, pay yourself six figures, which you deserve, which is a professional wage as a doctor that's gone through eight years of school, if you're going to. Be getting 175 an hour. There's not going to be a lot of meat on the bone, uh, for you to hire rehab CAs to do the rehab, for you to focus on the [00:10:00] exams and say whatever hands on stuff that your license allows you to do.

And it becomes a problem of spinning. Your wheels. And I don't want you to fall into that. I believe now with again, cost of running a business, cost of wages going up, cost of your personal lives, what you need to make as a professional living, we got to get into the 250. I mean, really get into the 300. I used to always say two 50, almost like feeling like 300 an hour capacity.

Like you're putting, it doesn't mean you're going to fill up every hour, every slot. But just give you an idea in our practice, we've got a, you know, about a hundred dollar office visit average. Uh, we, we have a high cash rate and we have personal injury in Florida that pays pretty well. We're not a big PI, but it's enough to where it's kind of an, you know, increased our office visit average.

And I can see five people in an hour with my team and myself. And so it's a 500 hourly capacity that my clinic has, and that has the margin and we've had. discussions about margin before, to where [00:11:00] I can hire, I can pay myself appropriately. I can have associates, I can have re abseizing at front desk to be able to provide a great experience and prevent myself in my 19th year of practice from burning out, spending an hour really working hard with a patient each time, um, and, and being able to maintain that.

And so I just wanted to talk about that. I love you guys. I love. Love the rehab DC. I just want you to figure out a model. And then on the, on the flip side of that, it's like, if you decide to charge a lot of money, 300 an hour for a session, and you decide you're not going to fall victim to the.

Commoditization trap, or you're going to sell a large cash package for this, which, um, I know that there's trends, uh, towards that, uh, we've kind of gotten back to it. We, we ran from it from the philosophical chiropractor selling huge care plans [00:12:00] for six months and big money. And then we're kind of going back into that with the rehab model, which, which is, which is fine, but you have to understand there's a big sales component to be able to charge.

a good amount of money to a particular patient for a session, whether it's 300 an hour for that one session or it's 5, 000 for a package. There's a big sales component to that. And many of you evidence based chiropractors don't want to be in the sales business either. We're all in the sales business, but you don't want to be in.

In that really a kind of the, the hard, harder sales business, not that it's hard selling, but that it's to get people to part with that kind of money is, is a different animal. And you have to be willing to do that. And so I just wanted to talk about that. I'm going to kind of be touching on that a little bit more because I love you, I love you rehab DCs.

And I just really want you to thrive and do well for many years. Not just when you're 28 and a lone [00:13:00] wolf, you need to be thinking longterm. All right. Next one is marketing ad spend. So someone asked how much. What percentage of your revenue should you spend on marketing?

Um, there's the blanket 10 percent number that a lot of marketers will throw out there or business leaders will talk about. You should spend 10 percent of your revenue on marketing. And for most businesses, yeah, that that's about where it's at. I just don't like the blanket number of saying, oh, okay.

You know, generating 30, 000 a month in revenue, I need to spend 3, 000 a month in marketing or I'm not doing enough. If your marketing is consistent, creative, and very good. And you're doing community outreach and you're having a great patient experience that's really driving a lot of referrals. You can get away with it for less.

And I, but I do think the mistake a lot of chiropractors have is they're at 0 percent or they're at like 0. 5 percent on marketing. And that's not a good way of looking at it either either. Um, [00:14:00] we've been doing a lot of marketing in this practice since 2014 and for a very long time I was at 3 percent and then the 5%.

I would say now. I'm getting close to the 8 to 10%, but it's been a slow build and we're spending more money now on Google ads and even Facebook ads. We've been doing Google ads for a while, but now we've added a little bit of a robust Facebook ads to it. And so we're getting up there, but I'm also seeing.

The results. So I'm not afraid to spend 10 percent on marketing if I see the results, but I've worked my way towards that. We still create a lot of our own content, try to position ourselves as an expert. We do our videos each month and things like that to make our marketing have more bang for its buck.

And so that is the. traditional, the 10%, but I would not just start spending 10 percent just because I said so, or anybody else did. I would work your way to that, but I would definitely [00:15:00] make sure that you are spending some money. Okay. Next is commercial real estate. Is it good to buy my office space? I was fortunate enough to do that in 2013, and it's been a very, very, very good thing for me.

It's helped drive more revenue and profits for my practice and it's, um, appreciated. Considerably for me in 11 years, and I'm very grateful for that. It was a very high risk at the time. Didn't have kids. Um, I was willing to take that risk, but it just really worked out, but it's not always the best thing.

I just, I'm not going to dive into it as a full topic. I probably should have a guest on at some point, but a couple of things. I was having this conversation with a client. You don't want to sacrifice your practice for the real estate, meaning you don't want to get into some, um, mortgage with all the property taxes and all the other things that come with it, [00:16:00] that's going to then really, uh, impact your cashflow, right?

If your rent, your place now is, you know, you got 1800 square feet and your rent is 3000 a month. And then you're going to try to buy a space that's 2, 500 square feet. And it's going to end up costing you 6, 000 a month all in because the interest rates are high and there's a lot of different moving parts.

You don't want to make sure that that increase in 3000 a month. Is going to really impact your practice and, and really drain the cashflow of that. And so now you've got this asset that yeah, may appreciate, but you're struggling and you're building up debt in your practice because you're having cashflow issues.

So you got to look at that. The other thing is, is like. And sometimes you may be okay and afford all the real estate and that's not the problem, but you move into a different part of town and it's just not the same part of town. And now your practice starts to decrease in revenue. So that's a problem.

Like you don't want to make a, a decision that's going [00:17:00] to really impact the growth of your practice. So you got to look at all the angles and the, the main point of me bringing this up is that overall commercial real estate, especially when your practice can pay the. Mortgage because you've got to pay the rent anyway, and it is all lines up and is congruent.

Like it has been for me and it has been for many chiropractors. It's amazing, but you got to make sure it really all lines up and that you're in a good part of town. Still, you've got the square footage that is not too little, not too much. I've seen people buy too little square footage and grow out of it and that's hard.

And I've seen people buy way too much more than they can handle. And that's a problem and that creates cashflow issues. And so just make sure that the office real estate is going to, is going to really help grow your practice and it's going to be a good asset for you. And that's when it's a great decision for you longterm, uh, for your business and for your [00:18:00] retirement.

All right. Last but not least, someone asked debt free versus bank loan, um, or debt to, to get a practice going and starting and stuff like that. And I'm not. expert here. Just going to give you a kind of a couple of things, but it's not going to be a full effort because I hate telling people to take on debt, but it's interesting, right?

If you were a veterinarian and I've, and I've kind of talked about this before, uh, or a dentist, like you couldn't just open up a rinky dink operation inside of a gym. No offense to anybody that's inside of the gym. I've been there before, so it worked out really good for me and it works out really good for a lot of people, but.

Like I opened up one room inside of this beat up old gym back in 2007 and you know, you can't really, and I was able to shoestring it, but you can't really do that. Um, as a veterinarian or a dentist, like you've got to really get an office space. You need a team, you need all [00:19:00] this equipment, like it's expensive.

And so they, for the, you know, unless they come from. You know, serious money. They take out a business loan and they start a business with a business loan. And yes, they have student loan debt, just like you do. Yes. I do know that their earning potential can be higher. Uh, but I also know a lot of chiropractors that make a lot of money.

I know a lot of chiropractors that make a lot of money. So if you think you have a limited earning potential, it might be more of a limited mindset. And that's something that MCM we're trying to get chiropractors to, um. To overcome because we've all been there, but I know a lot of chiropractors doing very well doing better than vet vets and even better than some dentists.

But yes, I know that the potential earning ceiling for them can be considerable, but they're taking on debt to open up a legitimate business that is nice. That has nice equipment. That is a good experience when people walk in and they feel like they're going to see a doctor. You wouldn't [00:20:00] go to your veterinarian if they were running an operation at the back of a CrossFit gym.

Again, nothing wrong with the chiropractor that's in the CrossFit gym, but you get the point. And so they're forced to take on a loan to open up a legitimate operation right at the gates. As chiropractors, we can kind of shoestring it. And it's okay, I have shoestring, I did it in a gym, and then when I opened my own practice in Boca Raton here in 2010, I rented one room inside of an orthopedic office, which I think is a great option for a lot of chiropractors.

It was a very nice office and it looked professional, and when people walked in, it was like, oh wow, this is a great office. I hired a front desk person right away, so they came in and they think, this is, this is amazing. And it was so much better for me than it was when I was inside of a gym, so if you can start finding an ortho Or a, uh, primary care doctor that's looking to rent a room.

That would be the way I would go if you really got to open up on a shoestring budget and you want to go debt free, but you got to get out and you got to get your own space at some point. And so you better start saving money or you better get comfortable with taking out a business loan. I [00:21:00] know a lot of chiropractors that have bought chiropractic practices and that takes a loan to do that.

And it has, for the most part, for most of them, it has, um, sped up the process of That's it. Having a busier practice that has more revenue and has more profits. So I know a lot of chiropractors that have taken on debt to open up a business again, putting all of our student loans aside, because I know you already have it, but they have decided to take on another loan to open up a full business out of the gates with a team or by a practice and things like that.

And that tends to. It tends to speed up the process of getting to where you want to versus opening up from scratch, no debt, shoestring budget, running a room out of places. For me, I did it in 2010, like I mentioned, um, I was able to do it in low overhead and, and I was very fortunate to ramp up pretty quickly.

And with three, within three years, I had enough money. To put down a, a down payment on a 450, 000, [00:22:00] um, piece of real estate. And it's actually more than that, because it was 450, 000 for the real estate. It was, uh, 150, 000 to build it out. And I had furnitures and fixtures and equipment. Like it was a big, it was a nice chunk of loan for me at 33 years old, but I had enough money to put a down payment on that.

And it was like 20 percent down, I think, to, to do all that. Plus they still wanted me to have some money. That's the thing was you try to get a loan. They don't want you draining every penny you have because they want to make sure you have a little bit extra so you don't go broke. And so I was able to do that then, um, and so I was able to save money.

So if you get into a low cost operation with no debt, save as much money as you can to potentially get your own space. And at that point, when you feel like you've got some liquidity and some stability, and your business actually is growing and could sustain your, Um, a new office space that you're renting or buying, whatever, then that's where it makes sense, um, to take out and that's just my thoughts on it.

I don't have a yes or no on it. I know people have done both with [00:23:00] each, but. It's not wrong to take on a small business debt to actually open up or buy or, um, or grow a practice faster. All right. Those are the seven topics that I had for you today. I hope that was helpful. If you have any questions that feel free to email me, Kevin at modern dash jockey.

com and I will help you out as much as I can. Have a great week and talk to you soon.