The Cost of an Adjustment

Have you ever done a break-even analysis for your practice? How much revenue needs to come in per month so that you can keep your doors open? Easy to compute right? Take the total expenses per month and for simplicity sake, the number of office visits needed at your average fee per visit (never your published fee, but that's another discussion) to match that.

We've all done this...all fretted about paying the bills to keep the doors open...

But have you ever broken it down further and calculate the actual cost to you in performing an adjustment in your office. That's right, how much does it cost you to deliver the adjustic thrust?

No idea?

Thought so.

I'm gonna ask you to include some things in the calculation most businesses wouldn't, because we're a distinct crowd, us Chiropractors.

Take your total office overhead for the month, then add your personal expenses to it. I include this because I know you. If you're like most DC's in startup mode, you probably don't actually pay yourself a set salary per month...you take what's left over (if anything!) and are happy with that. Something has to finance your personal expenses, therefore the need to include both business and personal expenses in this equation. Then take the total number of office visits that month and divide that number into the total business and personal expense.

Let's say your personal expenses were $2,500 per month (I hope you're living on organic peanut butter and jelly sandwiches for the start-up phase, it's a good idea to keep ALL overheads low!) and your office expenses were a fairly hefty $8,500 per month.

Break-even analysis says that if you charge $40 per visit, you need to see 275 people that month. ($11,000/$40 = 275)

Let's say you're in your fourth month of practice and have done some savvy marketing, along with providing wow service and your referral rate is high, and you saw 325 visits that month. The cost of providing care per person is $11,000/325 = $33.85.

Good news and bad for that number...good news is that it puts you in the black...bad news is the margin is less than 20%. Couple of things you can do to enhance the margin, increase the volume (which you will), increase the fee, or decrease the overhead.

I'd love you to be closer to a 40% margin, meaning in the above example your volume would have to be about 390 visits per month, bringing your cost down to around $28.50 per patient.

This can put some perspective on your budgeting process, on your marketing efforts, and on your educational systems to help you fine tune your strategy to accomplish your vision for a better world.

CTK and ITK...

I like to think I'm fairly tapped in to the latest trends in technology, culture, etc...certainly not to the extent that some people (creators or influencers) are, but enough to be fairly savvy in conversations with like-minded people.

Call it ITK...in the know.

And there are different tiers of knowing...let's subdivide into categories for clarity:

CTK - creators of the know - as a business owner, you have a tremendous opportunity to create the know, to establish the knowledge base in your community of Chiropractic and health, how they fit together and WHY people would want to engage and participate in the process with you. You have a responsibility to do this...it's up to you. Engage your creative right brain, use technology to get your message out (facebook, twitter, blogs). This builds your tribe and creates a forum for people to get connected to you as the leader, to each other as a family and to the BIG idea of Chiropractic and health.

Some industry models to learn from: Steve Jobs - Apple, James Cameron - filmmaker, Lady Gaga - pop artist, Jamie Oliver - chef, Ryan Murphy - TV producer, Soraya Darabi - Drop.io Find out what makes people tick, study creativity, branding, decision-making processes, influence and change. Then take action!

Then there's the ITK...people in the know that need something and/or someone to follow.

You.

There is a massive group of people out there that know our current sick care system is not working and need a new paradigm of healthcare, a group that is willing to embrace a new way of thinking and acting on their health. And they are looking for you.

You have a responsibility to be the CTK for your community...to create a knowledge base in your community that moves people toward health instead of away from sickness and disease.

It's time you position yourself and your practice as the leader for health and wholeness in your community, where people aren't just getting through the day, but giving to the day. You can and need to teach them how to do this for themselves, for their families, for their friends and co-workers.

So create the know...tap into the population of early adopters and influencers, teach them how to spread the message to others and watch your practice grow while enhancing the health and wholeness of your community.

Big stuff!!