How To Make Your Chiropractic Practice Recession-Proof

Does the current economy make you a little bit concerned? Stocks are dropping, crypto's crashing, and even big companies like Facebook are laying off thousands of employees. Have you seen the stuff going on with X/Twitter? It's crazy. It's one of the most challenging times in our economy.

As a business owner, you've got to know how to navigate this. It's easy to get scared thinking about the future of the chiropractic industry. Some are scared that they won't even be able to make ends meet. They might even have to close up their practice.

But I'm here to tell you, I've been through two recessions, and I made it out even stronger. And I want to share with you what you can do to ensure profitability and confidence going through this crazy market.

Step 1 - Economize

Step one in recession-proofing your practice starts with economizing. Now what does that mean and how do we actually know where we should be economizing because it sounds like constricting? In reality, it's a calculation that I want you to do.

We have this term in the Profit Accelerator System that we talk about called the “Minimal Viable Operating Overhead (MVOO). If we had to reduce expenses short term, what is that number that we could still service our patient base and provide those services?

It means that we may have to tighten the belt, look at payments we could potentially consolidate, look at ways to reduce cash flow that's going out the door, and hold on to our cash short term.

You need to know that number, and it's important for you to go through what we call the “Practice Overhead Worksheet.” It’s a worksheet of the Profit Accelerator System that breaks down your practice, and every category of expenses, so that you can come up with that number and know exactly what your overhead average is and start to look for ways to bring that down.

And when you come up with MVOO, you now have the confidence that anything over that will be profitable. We can start looking backward from the numbers. What would it take to generate and cover that on a monthly basis?

Just having that number in your head gives you peace of mind as you're moving forward into this unsure economy.

Step 2 - Secure Your Capital

This step is all about how important it is to dig the well before you're thirsty. We don't know what's going to happen with the economy. So it's important that we secure capital before we dive in.

In the Profit Accelerator System, we show a profit formula for practices to build up three months of their MVOO. It’s important to have that in a reserve account that you can't easily access. I would move that to where I can get to it within days, but not within hours. We want to make sure that it's not too tempting to tap into for frivolous spending.

This is the money that's protecting you, your team, and your family.

I had to get pretty serious about this number when I built a team so big that one bad month could really have sent us into shambles. So we built an account, and we didn't fund it all at once. We used our profit formula to slowly move money into that gas tank so that the gas was there if we ever needed it.

Now there were times in my practice when I didn't have extra reserves, and I did have to secure capital. And it's so much easier when the sun is shining to secure capital. With interest rates fluctuating by the day, it's important that you secure that capital sooner than later. You don't want to try to get money from the bank when everything is being locked down.

I remember when I started my practice, nobody would lend me any money. But when my practice was successful, everybody was trying to give me money! So when the sun is shining, go get some reserve capital.

If you already have it built up in your reserve fund, then that's your emergency gas tank. But if you don't have that, go secure some capital. It will give you peace of mind. You can't afford to not be able to take care of your team and your family if dark days are coming. Go secure a 90-day minimum of operating capital.

Step 3 - Make Smart Financial Decisions

As a data-driven practice, you start to generate a lot of cash flow. And I know in my practice, I began looking for opportunities to move money to where it would begin working for me by generating more income.

But this is the time when I really want you to think twice about big Investments. Work through the potential consequences if you lost that money, and how could that impact your practice. I don't want you to invest a single dollar that could potentially create pain downstream.

We want to put your money where it can still be working but maybe not quite as aggressively. And if you’re a data-driven doc, you're making smart decisions so that capital is there for you if you need it, when and if winter comes.

So just prepare. All the financial experts out there are telling us we're moving into winter, and our data-driven docs have that ability to come out of this stronger and even grow during the winter season because they're making data-driven decisions.

They're still using their money to grow their impact in their practice and help patients get the transformation in their health, which ensures a lasting connection with you. They will naturally turn to you as their trusted source of support when they're going through stress.

I hope you enjoyed these tips on how you can recession-proof your practice. If you want more, come join the community. It's a free Facebook Community called The Data Driven Practice. It’s where you can come to be a part of a community of amazing data-driven docs where we will support you in your next huge growth and success of building your dream practice. See you there!