How To Add $106,000 to Your Chiropractic Practice

A 5200% ROI Case Study on Dr. Jay Breitlow, by Dr. Jay Breitlow

When was the last time you had an investment with a Return on Investment of 5,200%?

 

I hear you, a return on my investment of 5,200%?!??!  I don’t believe it and I won’t read any further.  But before you close your browser, let me tell you doc, that you are very likely sitting on a goldmine and don’t even know it.

 

I know I was.

 

So let me tell you how I did it in 2 sentences and dish it further from there.

“I invested $2000 with Full Circle Coaching and Consulting to have an estimate done on how much my practice was worth.  The team found 9 real life upgrades that I could make to my office that would add a tangible $106,000 to the value of my practice. I mean it, not fufu magic numbers but real life numbers that banks love and lend cash on.

Here is how it went down in detail and why.

How To Add

Step 1:

I thought about all the stupid things I have done with stocks. I buy them when they are rising but sell them when they are crashing!  Ahh so dumb!!  But my trades with stocks were a few hundred bucks here and there for fun more than anything else.  

With my business I initially invested $25,000 to get it off the ground, and KNEW with all the blood sweat and tears that went into it that I was GOING TO SELL IT SOMEDAY AT MAX VALUE.

Classic buy low and sell high, except with much higher stakes.

We have all seen doctors hold on to their businesses for too long.  They love what they do, but they lose an edge and when it comes time to sell, they have to basically give it away.  The last thing you want to do is see you life’s work dissolve into nothing and get literally peanuts for it.

Just like anything else, you need a plan for it.

A succession plan, and that plan should start at least 3 to 5 years in advance.

 

Step 2:

There is a rule of thumb, and then there is real life knowledge.  The rule of thumb with businesses is that they are worth a year’s worth of billings. $500k in billings nets you $500k. You know you have heard that right? Until a bank comes in and says,

“No, it doesn’t work that way and we will only give a loan to someone for $250k because our underwriters think diddly-doo of your rules of thumb.”

No way did I want to be the guy that lost value in his mind because I thought something was worth more than it actually is.

The only thing worse than losing something, is losing something you thought you had but you never really had it!  

Double disappointment.

 

Step 3:

I found out that Full Circle has been appraising practices for 10 years and they’re on the preferred list for Canadian banks, so they’re reputable. I also knew Dr Tom Preston has been involved in dozens and dozens of sales and has been into the depths of this industry from being in practice, to coaching practices, to helping them sell on the open market.

On top of that I later learned he has a relationship with Bank of Montreal in Canada to look at his procedures and systems to ensure 100% reliability in the outcome. This was good enough for me!

Knowing I could find out the exact value of what I was sitting on and for a mere $2k felt to me like purchasing high quality life insurance.

 

Step 4:

The team told me my practice was worth a certain amount of money, within 10% of what I hoped  it might be worth, albeit less than the ballpark-rule-of-thumb rubbish.  Ok At least I know, money well spent.

BUT there was a Fifth step that went into this and this was the key.

Step 5:
and the most glorious step…

THE GOODWILL!

Turns out that most of the value of your office is in the “good will”.  This means that irrespective of how many people remain under your care for the year, or how many new patients you grow or you lose, your practice value can change by HOW you run it.

Confused?

So was I.

The easiest way I can explain it is this…

If someone can walk into your office today and run it with zero instruction from you, that is worth it’s weight in gold. Why do you think McDonald’s is one of the biggest and most successful franchises ever created (and most of their store’s management are teenagers)??!

 

For instance…

  •    Do you have a systems manual for your office?  If not you are giving away a couple thousand bucks right there.
  •    Got a metric that defines what % of your practice is wellness versus just acute care?  That’s worth some coin if you have more lifetime members than short term visitors.
  •    Do you have a team that refers and recruits clients consistently?  Yep there is a “multiplier” with that also.
  •    Does the length of your lease and renewability of your lease matter?  You betcha.

The list goes on further and deeper.  

So does this really net a couple hundred thousand?

Yes and here is why.

Take into account that all XYZ goodwill factors work together like multipliers.  It’s like the powerball!  If you hit so many multipliers, it takes your already hard work and amplifies it over and over! It’s like compound interest on 1980’s steroids!

I can’t make this stuff up.

Now there was some work involved in adding the 106k goodwill multipliers, but since you are already getting paid, you may as well perfect your craft and get paid even more.

“Frankly, I probably could have changed the title of this post and said I added over $200k with my initial $2k investment. “

Here is why… other things are starting to change as a result of the goodwill tweaks I am making in my office:

 

  •    My flow is better.
  •    The team is working tighter as a unit.
  •    The marketing plan is bomb proof and as a secondary result I am adding and tweaking like I haven’t done in years.
  •    We renegotiated our lease.
  •    We tightened up staff meetings and quarterly reviews to increase communication and team harmony
  •    We fired dead weight and hired A+ talent

 

This is increasing revenues, which wasn’t even the initial goal!

Is this the best $2k I have ever invested?

YOU BET YOUR SWEET PEACHES IT IS!  

And the best part of all, I have more confidence, control and a clearly defined exit strategy as a result.

 

The team created a 5 part series on the lessons that they’ve learned after appraising 100+ chiropractic practices in North America. These are the top 5 things you can improve today to help you net tens to hundreds of thousands of dollars more at time of sale.

See SYSTEMS THAT SELL, put in your email and put it to work today.

systems that sell, chiropractic practice valuation formula

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