How to Start a Chiropractor Business
Being a chiropractor can be a gratifying job, but if you’re working for someone else, starting your own chiropractic practice could be even more rewarding. You could be in control of your own practice and have the freedom of working for yourself.
Business Overview
A chiropractor business offers chiropractic services to patients, usually those with back and neck pain, using spinal adjustment techniques.
Industry Summary
According to IBIS World, the chiropractic industry size is $18 billion and is expected to increase 7.6% in 2021. There are over 68,000 chiropractic businesses in the United States. Some offices will focus on a niche such as orthopedics, nutrition, sports medicine, or other specialties.
Industry Trends
The industry is expected to grow as people seek drug-free alternative types of care for back and neck pain issues. Also, many chiropractors are partnering with other health care providers to increase their referral business, which will drive the overall revenue for the industry.
Target Market
Your target market will be people with chronic back and neck pain issues.
Skills, Experience, and Education Useful in Running a Chiropractor Business
There are several specific skills that you will need to open a chiropractor business.
- Education. You need to have the proper training and licenses.
- Business knowledge and experience. You will need to have at least some basic knowledge of marketing, finance/accounting, and human resources.
- People skills. You’ll need to be able to build rapport with your customers so that you retain them as customers and keep them coming back.
Checklist for Starting a Chiropractor Business
When you’re thinking of starting your own business, it’s important to do your research first. Figure out what you need to do to make your business a success. Below is a checklist of the most important things you need to do when starting a chiropractor business. By following these tips, you’ll be on your way to running a successful chiropractic practice.
Step 1:Â Write your Business Plan
After coming up with the idea, the next step in starting your chiropractor business should be to write a business plan. Â The business plan will make you focus on some important aspects of the business, such as who your customers are, how you plan to reach them, projecting sales and expenses, your value proposition to use for marketing, and more. You’ll also need to do some research to calculate exactly what your start-up expenses will be and what your ongoing expenses will be.
Not only will a bank require you to have a business plan if you need financing, but multiple studies have shown that having a good business plan increases the odds of starting a successful business. Writing the plan helps you to think through all the aspects of the business and then serves as a guide as you begin.
Related: How to write a business plan
Step 2:Â Name the Business
Finding the perfect chiropractor business name can be challenging. Not only does the name have to reflect what you do and be appealing to customers, but it also has to be available to use. You can check your state’s website to see if the name is available and register your name. Â Your name should make you stand out, reflect your brand, and tell potential customers exactly what you do.
Step 3:Â Form a Business Structure
A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.
When deciding on which business entity is best for a chiropractor business, it normally comes down to the sole proprietorship and Limited Liability Company.
A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay. The corporation can be a good choice because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.
That leaves the sole proprietorship and LLC.
The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.
Related: 3 steps to forming your LLC
Â
Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.
Some popular LLC formation services include:
IncFile - $0 plus state fees & free registered agent for 1 year!
IncAuthority - $0 plus state fees & free registered agent the first year!
ZenBusiness - $49 plus state fees & free registered agent for 1 year!
Step 4:Â Select your Location
You need a location for your clinic that is convenient to customers, preferably near other health care providers or in a doctor’s park.
Related:Â Choosing a business location
Step 5:Â Apply for Business Licenses and Permits
Chiropractic practitioners have several regulations to be aware of. From client privacy regulations under the Health Insurance Portability and Accountability Act (HIPAA) to state professional licensing and others, it’s important to research the required licenses and regulations before starting a chiropractic office.
In addition to chiropractic business-specific requirements, there are also general business requirements that may be required, such as a business license, sales tax permit, or Employer Identification Number (EIN).
Related:Â Common business licenses, permits, and registrations by state
Step 6:Â Find Financing
Coming up with a good business idea and having the skills to run it are one thing but getting the funding to start a chiropractor business is another. Â In order to get a loan, the borrower(s) will need to have good credit and be able to invest 15-25% of their money towards the total start-up costs.
Related:Â Finding the money to start a business
Step 7:Â Open a Business Bank Account
Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the income and expenses of the business.
Step 8:Â Get your Marketing Plan in Place
A marketing plan also needs to be in place. There are several advertising options, including print ads, internet marketing, social media marketing, radio ads, TV commercials, and setting up a boot at local health fairs.
Networking with other health care providers is critical to bringing in new patients.
Related:Â Low-cost ideas to market a new business
Every business is going to need a logo. Make a professional logo in no time with the free logo makers from BrandCrowd and Canva.
Step 9:Â Get Business Insurance
A chiropractor business needs several types of insurance for full coverage:
– General liability insurance can help protect you from third-party claims of bodily injury and property damage.
– Professional liability insurance protects you from claims of professional errors or negligence that result in a financial loss.
– Worker’s compensation insurance covers expenses like medical bills and legal fees that a business might face if an employee were ever hurt while working.
Insurance policies will vary. To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, consider not only the premiums but also how the plan exclusions, coverage limitations, and deductibles compare.
Step 10:Â Hire Employees
To run an efficient practice, staff will be needed. Labor is the highest cost for a practice.
In addition to salary costs, your budget will also need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a business will need to cover when hiring staff.
Related: Hiring your first employee
Step 11:Â Set up an Accounting System
Setting up an accounting system for your chiropractor business is critical to the long-term success of your business.
Staying on top of taxes not only keeps the business out of trouble with the government but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.
StartingYourBusiness.comHow much does it cost to start a chiropractor business?
The average cost to set up a single chiropractic clinic is about $70,000 according to the US Department of Labor’s Bureau of Labor Statistics.
However, this amount does not include any promotional or marketing costs.
For a chiropractic clinic, the cost of equipment and furniture can be up to $100,000 or more, not including land and building costs. Moreover, start-up expenses such as rent, licenses and insurance must also be considered for total startup costs to reach $150,000 at minimum.
Here are the typical costs you will face when you open a chiropractor business.
– Setting up a business name and corporation costs approximately $200
– Business cards, brochures, postcards for marketing $200 – $300
– Office lease $2,500 – $5,000 monthly
– Equipment such as a chiropractic table, electrotherapy machine, x-ray machine, etc. – $10,000 – $200,000
– Furniture, other office set up $5,000 – $25,000
How profitable is a chiropractor business?
According to Chiropractor Economics, the average solo practioner generates $369,000 in revenue annually.
Forbes Magazine ranks chiropractic practices as one of the most profitable type of business, with an average pre-tax margin of 17.5%.Â
With these numbers, the average chiropractor practice would generate a profit of almost $65,000, plus the owner’s salary.
Many chiropractic offices can generate additional revenue on top of seeing patients by selling supplements, braces, pillows, and other equipment.
While generating revenue is important, more important is outsourcing or having a good medical billing department to collect from insurance carriers. Inaccurate billing will can your practice to either not get paid, or wait long periods to receive the money it’s due.
Are there grants to start a chiropractor business?
It’s extremely rare to find a grant to start a chiropractor business. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.
Legitimate federal grants can be found at Grants.gov and you can check on your state’s economic development office to see if they have any grants available.
What is the NAICS code for a chiropractor business?
The NAICS code for a chiropractor business is 621310, which is offices of chiropractors.
The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.
