Making your dream come true
How to find your ideal location
By John O. Marty, DC, DABCO

When you were a child, did you dream of becoming an astronaut, conquering aliens in outer space, hitting 70 homeruns for the Yankees, or becoming the first female president?

By now you have probably realized a portion of your life’s dream. Your professional life is now in transition. After a long and vigorous academic pursuit, you have graduated and have been awarded a chiropractic license and are now seeking a practice location to fulfill your dream.

Or perhaps your initial choice of a practice site has not fulfilled your expectations and you want your dream revived.

The bad news is that starting a practice today with student loans approaching $126,000¹ and start-up costs of $35,000 to $50,000 requires nerves of steel. Studies indicate that 60 percent of graduating seniors are now becoming associates, 20 percent to 25 percent practice with relatives or friends, and only about 15 percent go into solo practice directly out of school.

After a three-year period, 50 percent of the associateships are dissolved.² This means that at any one time 40 percent to 50 percent of recent graduates are seeking solo or group practices.

The good news is the future is brightening for chiropractic. According to the National Health Interview Survey conducted in 2002 and reported in 2004, nearly 20 percent of the U.S. population has used chiropractic at some point and 7.5 percent of the adult population of the United States uses chiropractic each year.

A report by the Institute for Alternative Futures entitled “The Future of Chiropractic Revisited: 2005-2015,” indicated that public demand for complementary and alternative medicine (CAM), dominated by chiropractic, is increasing. Routine healthcare is beginning to be patient-managed by higher deductibles, which leads the way to health savings plans, with insurance providing catastrophic coverage.

Until these projections are a reality, it is imperative for graduates and practicing doctors who are seeking new sites to use objective data when making a practice decision. Just a few years ago, “If I build it, they will come” worked because there were simply fewer chiropractors.

Practice management courses imply that graduates can succeed in practice if they master the right technique, implement correct patient management techniques, and seek patient referrals. It is a given that all of these attributes are important to practice success. But one of the most important elements for your success is the real estate mantra: “Location, location, location.”

If you were to choose a practice site with poor demographics, you would have an experience akin to flying upside down blindfolded.

To find the best practice location, base your decision on three principles and eight demographic factors applicable to chiropractic.

These three principles³ are:

1. The zone around your potential practice site is the most dominant demographic factor because two-thirds of your patients reside in this 1 to 25-mile radius around your practice site depending on the density of the population.

2. The denser the population, the smaller your practice zone.

3. Twenty-five percent of your patients make up 80 percent or more of your patient revenue.

These principles have been used for years by large firms such as General Mills, McDonalds, and others to locate their retail outlets. The challenge was to determine what factors related specifically to the chiropractic profession.

Research zeroed in on eight demographic factors that would affect the viability of a chiropractic practice. Here are the ideals:

1. The chiropractic ratio. The chiropractic ratio is the ideal chiropractic population (25 to 54 years of age) divided by the number of practicing doctors of chiropractic. All data is sorted to this essential factor. The ideal ratio is 2,500 population to 1 DC.

2. Median household income. The target income is $50,000.

3. The ideal chiropractic population. Surveys compiled by the several chiropractic organizations indicate that persons 25 to 54 years of age use chiropractic services most frequently.

4. Density per square mile. In rural areas, the density of the ideal chiropractic population (not general population) per square mile is 1 to 50; for suburbs, it is 50 to 200; and in urban or large cities, it is 200 or more. Density per square mile cannot be calculated for zip codes.⁴

5. The total number of DCs in an area. This is more important than the population. When making your final decision, count yourself when determining the DC population ratio.

6. The total population. All persons not in the total ideal chiropractic population (25 to 54 years), such as children and the elderly, should be noted as not as likely to be your patients.

7. Percentage of females. More than 55 percent females in the targeted population is desirable.

8. Household ownership. People who own their own homes are a more stable element in any given community and are economically more reliable.

USING THE DEMOGRAPHICS

What do these demographics mean? Here is what you should be looking for:

• The ideal chiropractic population per doctor of chiropractic ratio is the most important factor to consider. Judge all other factors against it when making your decision.

• A median household income of more than $25,000 is generally considered to be sufficient to enable potential patients to use your services.

• Population density is a powerful factor. A high chiropractic ratio that isn’t supported by a reasonably dense population base is a recipe for disaster.

• When all things are equal, consider the percentage of females and household ownership.

MAKING YOUR DECISION

Once you have obtained your data and found some promising sites, visit them. Meet with the chiropractors in the community, and talk to people you meet to assess their attitude toward chiropractic.

Some other questions that can affect your decision:

• Are there up-to-date hospitals and other health facilities near by?

• How good is the business climate? Find a realtor who uses a software program that ranks schools and the local business climate.

• Would you fit in with the ethnic climate of this community?

• Is this a magnet community that attracts people to it?

Try to imagine yourself and your family living in this community. After you have made your final decision and set up your practice, start using marketing consultants and the tools found in recent articles of this magazine.

To this add confidence and enthusiasm and realize you have given yourself the best possible start to fulfill your dream of a successful chiropractic practice.

John O. Marty, DC., DABCO, is one of 15 members of his family who have been in chiropractic. He became a chiropractic diplomate in 1983 and is currently in part-time practice with his son, Phillip in Excelsior, Minn. In 1988 he founded Locus Chiropractic Location Services, www.locusmap.com. He can be contacted through the Web site or by calling 800-743-6676.

References

1. Northwestern Health Science University, Bloomington, Minn
2. Katz Management & Associates
3. Vern Cafarella & Associates
4. Business Information Technology (BIT)