The Chiropractic Files

Opening A Practice Part B

Remain Driven In All That You Do!!!!!!

This next section will deal with more information geared towards getting your ducks in a row.  This is intended to be a guide.  So please you this information accordingly.

8.  Your Build Out (continued).   The build out of your office is vital to all "First Impressions."  When patients, or more importantly, potential patients step into your office, their first impression will be based on the look and feel of your office.  Wall colors, carpet colors, Front desk color schemes mean so much....With that said, you are going to need Signage.  This can be very tricky, you must first see if the Landlord will include this in your build-out.  Some will, others won't.  If not, then you need to call around and find the best price.  Also, read through your lease agreement and make sure you are staying in accordance with what you signed in your lease.  Landlords that care about their shopping centers would want all Tenant signs to be congruent with one another.  Meaning: Same size, same shape, not necessarily same color..but you get the idea Ex.  Lets say the name of your clinic is Smith Family Chiropractic.  The person creating the sign can use "channel-individual- letters for Smith Family" and use a "modular capsule-all-in-one for Chiropractic"..The sign outside my clinic: 18 inch High Channel Letters mounted on raceway with a 10'x16'' modular unit, internally illuminated with neon..total width is about 25 feet across).  Cost: $3850.  THE SIGN I HAVE JUST DETAILED IS NOT NECESSARY IN ALL CASES, PLEASE KEEP THAT IN MIND. This includes permits and sales tax..  I repeat, this includes permits!!!!  You will need permits to complete your build-out.  Your landlord and his/her contractor must handle this for you.  They are responsible for this...NOT YOU!  I've spent some time on the build out...because it is very important that this goes smoothly.  If not, it can delay your opening!  How long should it take?  Not sure...depends on how much you are having done.  But if contractors work quickly, a mid-size office can be complete in 30 days.  Which brings me to another point.  PLAY HARDBALL!!!  You don't want to pay rent while the build out is taking place.  Timing is everything....

9.  X-Ray Unit Installation:  What should I do?

For those of you looking to take x-rays in your office.  And it is nothing like taking x-rays in school...Much, much, much easier...I can do a cervical and lumber series in less than 5 minutes...Your landlord should have prior knowledge of your intent to have an x-ray unit installed in your office.  State laws vary..so call your chiropractic board for that state. They may tell you that you need a physicist report taken for your space to determine where you need "lead-lined drywall".  This is so easy to do...whoever you are purchasing the x-ray unit from should give you a heads up on this.  If you need this "type" of drywall installed...it SHOULD NOT COST more than $1000 to do. Lead-Lined drywall is just that, drywall that has a thin lead sheet glued to it.  It will come with special nails and nail caps to make sure it's done right.  Especially if you are just going to do a single wall in the x-ray suite.  and for the record: an x-ray unit from www.scrip-inc.com, will run you about 16k which will include the developer as well...  how sweet is that!

10.  MARKETING ONE-O-ONE!

Your clinic is starting to come together..Walls are going up..phone lines are being installed...call your local phone company by the way...a business line is what you need....you're going to need a Main line, a roll over number, and a dedicated fax line.... and high speed Internet...there are packages out there for you..roughly : $290 a month for that type of deal. Please don't have business cards made until you have secured that business phone number!  You must have two things in line when marketing your clinic from the start...(1) Open Date is Concrete.  (2) You have business cards to hand out when talking with potential contacts.  You must join at least two civic groups....Chamber of Commerce and maybe a BNI group..(Business Network International).  Civic groups will put you in front of multiple people all at once.  You must become a walking billboard.  Meet and greet as many people as possible before you open...Talk to the people that do business next to you....Talk to the people that do business around the corner from you.  Create a list of contacts, and invite them to your open house...Create a buzz about your new chiropractic office.  Most Chambers of Commerce will have Ribbon Cutting Ceremonies..which will include the local paper putting your ribbon cutting in the local paper for FREE.  HELLO, I said FREE.  Open up the business section and there you are....Smith Family Chiropractic Now Open..123 Will Hollow Drive, Anywhere, NY 11570.

This should be enough to get you thinking about how you want to practice, and also what steps you need to take to keep things moving smoothly if you have already decided.  Part C will be coming soon.  I hope this last section, has shed light on the build out...Part C will include more marketing and some special attention to building up your business credit.  Once again, if you have any specific questions, please feel free to voice them here in the public domain..or more discretely at : nosurgery@yahoo.com

Dr. Mark

Opening A Practice..Part A

Opening a Practice Part A:

This is going to seem so simple, but there will be times you feel overwhelmed.  If you find yourself at the end of your rope, tie a knot and hold on.  Here we go:

1.  Start a Corporation..probably a P.C....ex ABC Chiropractic, P.C  (or a L.L.C.)

How it's done:  You can have this service done through "The Company Corporation" via the internet www.corporate.com or give them a call 800-877-4224 The process is so simple, but it will run anywhere from $300-$750, depending on what state you are opening your corporation.  The reason why a P.C. (Professional Corpoartion) is used in some states, is because we are licensed doctors and that would require a P.C. established entity. 

2.  Obtain a Federal Tax-Id number.

How it's done:  If you went through www.corporate.com or something similar, they would have done this for you.  Or you can contact the IRS.gov website and apply for one.  There is no cost to do it yourself.  But you need more than that to get your practice rolling.  So, with that in mind, let professional handle that for you.  Some people hire an attorney to do all this for them.  You can go that route, but I'm not sure what the going rate would be.  But typically, if you cut the middle man out, you usually get the same thing..but for less.

3.  Get in Network with one or two insurance companies...My suggestion: BCBS, Cigna, Healthlink, Medicare* and Never ever use United Healthcare unless you want the frustration.  Some parts of the country will determine which ones would best fit you.  Talk to some local docs and find out from them which ones they use.  If you decide to go cash only....you have some hard work ahead of you....so stop reading this blog..and GO SCREEN PATIENTS, Not NOW...but Right NOW!!!

4.  Oh, before I forget...Before you apply with insurance companies...You are going to need some malpractice insurance.... NCMIC, Chirosecure, etc...whoever...should not cost you more than $1,000 the first year... You'll need a copy of your degree, license, malpractice, and fill out a W-9 form, which you can print off the www.irs.gov sight.. W-9 form: what's on it: Name of Corporation, address, Tax-Id number and a signature from you and date...That's It!  You need this stuff to become a Provider.

5.  $$$$$$..You need some money to get going.  SBA loan, Mom and Dad, Uncle Bob over in Brooklyn..you need some money.  How much?  Well, that's up to you.  How do you plan to practice?  Are you doing a Two Day ROF.  Are you taking X-Rays?  Are you doing PT?  Are you using Medisoft, Ez-Biz, Just for Chiropractors, do you have staff other than yourself, etc.....

6.  Practice Space...How much room do you need?  My suggestion is to go around 1000 sq/ft office.  If you are practicing solo.  Maybe bigger...not sure what you have in mind.  How much should you pay?  Not sure...depends on your area.  You start looking around and you find a space for rent...Sign says: 1000 sq/ft office space for lease.. $10 a sq/ft... What does that mean?  You take 1000 sq/ft times $10...then divide that by 12 months= $833.33 per month for rent.  Then you have to include the triple net charges...This can range anywhere from $1.50-$3.75 a sq/ft extra. Triple net?  What the heck is that? : All taxes, insurance, and maintenance expenses that arise from the use of the property. So after it's all said and done, you're looking at $1,041 a month in rent if your triple net was $2.50.

7.  Build-Out Expense..  Now you found your space...This is where your gonads have to show up..Ladies, this is for you too.  You are about to sign a lease on a space and open up a wonderful chiropractic clinic.  Your landlord understands that chiropractic is great, and that you are going to bring foot traffic into their shopping center.  He or she sees $$$$.  The space you found has nothing in it.  It's a shell...no carpet, no paint on the walls or anything...open floor plan, and some bathrooms.  Your landlord will build whatever you want in that shell, provided you take some of the burden off of them.  PLAY HARDBALL...YOU WANT IT ALL FOR AS LITTLE AS POSSIBLE.  You need walls put up...you need doors put up...The build out should not be $50,000....lol... An average build out for a standard chiro clinic should not cost more than $10,000...if you have a small space..(You don't need a waterfall in your lobby area)  Your landlord should put up some of the money to have this done...You have to come up with the rest. 

Part B coming soon...This should be enough to get you started...

Dr. Mark

Any questions: nosurgery@yahoo.com

From 1 Figure to 7 Figure

Hello all, I'm Dr. Kinland.  This is an absolutely true story that I'm about to tell you. I went from making no money to a 7 figure income in the past few years. This is my story.

After I graduated 12 years ago, I decided to jump straight into a practice.  I wasn't the type to work for somebody else, specially when that somebody can do the same thing that I can, and went through a similar education that I did. 

So, I decided to buy a practice and for obvious reasons I am not able to say the location of those practices.  After graduation my student loans were not as much and I had some extra funds and contributions from family.  I brought a small practice for about $80,000.  I was told that the first few weeks or even months of practice will be slow.  So I expected to be slow for a couple of months.  Keep in mind that I did not know much about billing, insurance, marketing and talking to patients.  I did Ok in school, so I figure my intelligence would pull me through.

Do you know what being in the Reds mean.  Well, let me explain.

When your overall debt (overhead, staff, lease etc…) is $5000/month and you are bringing in $ 2500/month, then that’s red. Obviously, you don’t have to be a math genius to figure out that you will not be able to keep this up without running into the ground.

Needless to say, after 2 years I sold that practice and took a hit. Let me give you an example of why this practice failed.

I was fresh out of school and I did not know how to run a business and my billing person was just as ignorant as I was when it comes to finances. Hiring knowledgeable staff is very important in starting a practice. Ok, I was working with a Work Comp case and it was a good case. We verified the information and the adjuster told me that the bills will be paid. Little did I know that for a Work Comp case, you will need a claim number and an authorization number. In any case, the bill came up to about $9,000 and I really needed that money to pay my overhead, staff etc……A few weeks after bills were sent out, I received a letter stating that the bills were being denied. The reason why!!! I did not have an authorization number and was never authorized to treat. WOW, talk about a stab in the heart. Lesson here: always have authorizations in writing. What is said over the phone means absolutely nothing.

See, the problem is coming out of school, you are not aware of these issues. I was not using a consulting firm and I had similar problems the coming months. A year later, I sold the practice and took a lost. The only good thing that came out of it, is that I know what not to do for the next time around!!!!!!!!

At this time I was broke, but the good thing is that I had good credit and I was fortunate enough to take a loan. This time around, I decided on another approach. I did not concentrate on the PI, Work Comp type practice and this new practice was mostly insurance. Oh, boy let me tell you, it was horrible. Now I know why some doctors will only run a cash practice. My fees were being reduced, paper work is a nightmare, some of the bills were being denied and it took an eternity to be credentialed with some of those insurance companies. This time around, I did not have a patient flow problem but a cash flow problem.

I had more patients than the first practice since I knew a little more about marketing. My money however, was less because of reductions, denials, patient inconsistency etc…..not to mention that the state laws were not chiropractic friendly.

Now, I was faced with a problem, actually a couple of problems.

1. My family was growing and I needed the finances. Talk about stress, now I see why people can go crazy. Running a practice is STRESS, STRESS, STRESS!!!!!!!

2. My first practice failed and now my second one is failing and I have just a little bit of money left from the loan.

3. I consider quitting the profession and simply getting a regular job!!!!!!

4. I was depressed.

5. I did not know what to do!!!!!!

So I did what most people wouldn’t do I moved my family to a new location and started a very small practice while maintaining a part time associate position. I also decided to go with a consulting firm.

This time around I knew the do’s and dont’s and once again I started with a slow start. The only difference is that my new practice was very small and my wife did the billing, my overhead was very low, and I did PI, Work Comp and Insurance.

It started with 3 to 5 patients a week. 1 month later I had 20 patients/Week. 4 months later I was averaging 60 patients/week and was able to quit the part time associate position. Within a year 160 patients/week. Good news, my practice was now too small and I had to expand. As we speak, I’m averaging 350 patients/week and my total net is $1.5 million/year. That’s not what I take home by the way. You must deduct taxes, staff, overhead, marketing budget etc……

I went through a hard time and I know that a lot chiropractors are going through the same. Don’t give up!!! There’s a light at the end of the tunnel. A few tips to consider:

1. For PI practice, build relationships with attorneys. Most attorneys could care less about you, it’s a good idea to make the first gesture. Send them a patient then contact them and schedule a lunch. Keep the relationship going. You send one or two, they send one or two.

2. Make absolutely sure that you have a claim number and an authorization number for Work Comp cases. Verify all billing info and addresses.

3. Always have back ups. When a patient walks in get copies of drivers, license, insurance card, PIP information of that patient & PIP information of the other party.

4. For new doctors wishing to start a practice get credentialed with the insurance companies, medicare etc…. ASAP. On average, it’s a 3 to 5 months process depending on the state.

5. School will not teach you about the real world, it’s a good idea to be involved with a consulting firm if you are clueless. The consulting firms know the laws and the new changes when it comes to insurance etc……

6. Make sure that all Insurance paper work are submitted on time, e.g. ACN, ASHN, PIP etc……Your claims can be denied if the forms are not submitted on a timely manner.

7. Last but certainly not least, MARKETING, MARKETING, MARKETING, MARKETING. Word of mouth and referrals are good, but referrals will take some time. You need patients in order to survive, so once again MARKETING, MARKETING.

Of course I’m being very general, obviously I cannot mention some of the other techniques for legal reason, but follow these advice and you should be OK.

I can go on & on but I just wanted to write my story in order to inspire those that are going through a hard time. Don’t give up!!!!!!! Feel free to comment.

I’m very busy and I may not be able to answer your questions but I will try.

Good LUCK

Dr. Kinland, DC