3 Steps To Surviving Any Economic Downturn: Economy-Proof Your Chiro Practice

We all know the economy is going through a rough patch right now, and it's always going to be up and down. I have been through several cycles in my practicing career, and there are things that you can do to protect your practice, especially your income and your team's income.

There's nothing worse than having to lay off a team, and I want to make sure you're ready to actually hire, not lay off. So, let's look at the three best steps you can take to economy-proof your chiro practice.

Dr. Bob's story is an excellent example of the challenges chiropractors face when expanding their practices. Just as he was transitioning from one location to two, the economy took a downturn. With the added overhead of a new location, Dr. Bob struggled to keep his business afloat.

Expanding a practice is no easy feat, especially when dealing with external factors like economic shifts. There are many more moving pieces and overhead once you expand. And now the economy was dropping.

Picture this: you're watching your savings dwindle instead of grow. Fear grips you as your team looks to you for guidance, wondering how you'll weather the economic storm. But Dr. Bob was smart enough to implement two key things.

The first thing that he implemented was making sure he was making data-driven decisions. He immediately got our data-driven dashboard, which allowed him and his team to see the efficiency in operations.

Now, all businesses, even successful ones, have inefficiencies. By identifying and tweaking these inefficiencies, practice owners can boost their profit margins significantly. And when multiple areas of the business are optimized, the resulting gains can multiply, leading to remarkable profitability while actually working less.

Dr. Bob recognized this principle and immediately took steps to implement a data-driven approach to his practice.

Tip No. 1: Diversify Your Marketing

In this first tip to survive any economic downturn, I want to give you an analogy of a table. If you had a table with four legs, and I came in and cut one of those legs off, how stable would that table be?

It would not be stable – in fact, it would be wobbly. Have you ever been to a restaurant sitting at a wobbly table? It’s a miserable experience. Nobody likes it, and I don't want your practice to be wobbly.

Now, think of a table that had a thousand legs. If somebody came in and chopped off one of those legs, you would still have stability. Many of you depend on one source of attracting new patients, like Facebook ads, and I caution you that you need to diversify your marketing.

You need that thousand-leg table for your marketing. That’s because if one leg gets cut, and it happens to be your sole source of new patient acquisition, the cost of attracting new clients could skyrocket, causing your entire practice to wobble.

By diversifying your marketing and getting good systems in place, you’ll create stability.

Tip No. 2: Understanding Your MVOO

Understanding your Minimal Viable Operating Overhead (MVOO) is crucial because it determines the percentage of your revenue for running your chiropractic practice.

This margin can range from 50% to 80%, depending on the type of practice you have. Essentially, this means that up to 80% of your revenue is allocated to covering your business expenses.

Ensuring that your income can comfortably support your lifestyle is crucial, even with these overhead costs in mind. If your revenue or margins fluctuate, this could directly impact your paycheck, so it's essential to factor these potential variations into your financial planning.

So you're going to really look at your Profit and Loss (P&L) statement. This is the financial statement that your bookkeeper or CPA should be sending you regularly.

One of the coolest things we do in our profit accelerator system is to help you build a data dashboard with a real-time P&L so that you’ll always see it. On that dashboard, we convert and calculate the exact number of the percentage of operations that are consuming your collections.

So, to protect your practice from financial setbacks, it's crucial to determine your MVOO. It represents the minimum revenue you need to generate to keep your practice afloat, even during challenging times.

By identifying your MVOO, you can ensure that your practice can weather any storm, even if you need to make some temporary adjustments to your operations. While these adjustments might make things a bit tighter, they'll allow you to continue serving your patients without jeopardizing your business's sustainability.

Also, when the sun is still shining and you have cash, it’s a good idea to pay down debt as quickly as possible. I recommend looking at your debt table and ways to consolidate that debt to a lower interest rate so your payments go more to the principal than to interest.

If you can reduce that debt and that debt level, you can go into an economic downturn, and your MVOO is lower, leaving you room for more profitability.

Tip No. 3: Investing In Yourself

Now, this tip is so important because it is the key that's helped me grow through economic downturns. I actually ended up increasing the size of my practice through our last economic downturn because I invested in myself.

If you're reading this, you're on that roadmap. That means you're a lover of content. You're a lover of learning. And I champion you because people who are coachable end up surviving and thriving through economic downturns.

There are opportunities left and right. With the economic change, there will be healthcare practices that don't weather the storm, and their patients will be looking for other healthcare providers that can serve them.

If you invest in yourself by learning how to operate a business, how to hire and train team members who become experts, and how to make data-driven decisions, you will be blown away at the size of an organization that you can build that scales with the demand that's coming your way.

Learn how to do incredible messaging and marketing and organically attract your ideal patients. That is how you will thrive through the economic downturn, and that is how you will build a community that supports you and grows through what's coming.

These are the steps to surviving any economic downturn, and I truly believe that your greatest future and your greatest success are coming if you follow these steps. Now, if you want a little warmth, support, and richness in your life, join our free Facebook community, “The Data Driven Practice.” You’ll be in the company of like-minded docs who are crushing their growth, and I guarantee will lead us through this storm.

You do not want to go through winter by yourself. You want to go through it with a community. We are here for you. So come on, sit around the fire with us, and get warm as we help you light up your practice and prepare for this economic downturn. See you there!