Are you ready to add more services?
By Tom Deters, DC

Expanding your practice by adding new products and services can be exciting, fun and profitable. It can also be tricky. Ideally, you can embark on this new area without diminishing your core business and actually increase business overall by attracting new patients.

The tricky part is making sure that your returns are worth your time and effort and that each new product or service benefits your community in the ways you had envisioned. You can end up diverting both your and your staff’s energy from your core business without gaining the profits you had hoped for.

HOLD TIGHT TO THE CORE

No matter what the new opportunity is, it is usually wise to make sure that you protect, or even plan to grow, your core business as you implement your new plans. Why? Because 95 times out of 100, your core is still the easiest and most efficient way to grow revenue and profitability.

In California, because of changes to workers’ compensation law, some doctors who used to have thriving practices are now scrambling for new revenue streams. Most are looking for the “magic bullet,” experimenting with sleep clinics, massage clubs and fitness centers. While all of these ideas have merit, they may or may not be viable, and they may cause you to neglect your core business. That increases risk substantially.

The potential cost increases as we go through a strategic assessment, especially when little effort has been made to develop the other core revenue streams (beyond workers’ compensation, such as personal injury and managed care) or the cash part of the practice. No wonder some doctors look for new revenue streams — they have not nurtured the old ones. Operational action plans to increase referrals, new patient visits and the average number of patient visits through better patient education should all be used to protect and grow the core.

STEPS 1 AND 2: PATIENT EDUCATION

One of the first indicators that a practice is positioned for growth is a high level of development in patient relationships. How deeply sold are your patients on your services? How educated are they? Do your patients tell you how many adjustments they need? Truly educated patients not only comply with regular adjustments, but also refer their family and friends because they see the value of chiropractic care. Building patient relationships takes time, energy and skill, but is a sound investment.

Some doctors hate to hear this, but building relationships comes down to selling. Whether we choose to believe it (or embrace it), we are selling something (whether it is ourselves, a message or a point of view) every time we interact with someone. Always maximize this aspect of your practice, not only to strengthen your core business (which is your platform for new revenue streams) in terms of revenue and profit but also to sharpen your skills and position yourself for the next step in business.

My point is that a practice that does not maximize its patient education and relationships may have a difficult time making a leap to a new area of services because it has not honed the selling skills to educate and motivate patients to buy into its new services.

WELL, WELL, WELLNESS

So let’s talk wellness. What does it mean to you? What does it mean to the doctor down the street? What does it mean to the public? According to this year’s salary and expense survey conducted by Chiropractic Economics, almost 20 percent of chiropractic practices now have “wellness” somewhere in the title of their clinic.

While that may be a positive thing, it is also confusing to the marketplace. As with most messages, it is not what you say but rather what the audience hears that is important.

Is wellness nutrition? Fitness? Smoking cessation? Low-back schools and workplace ergonomic evaluations? Regular chiropractic adjustments? All the above?

In order to grow a business and sell a unique product or service, you have to create an identity for that service, advertise a series of features and benefits and position your product or service as being different or special in the marketplace.

Asking the people in your community to wrap their minds around the concept that you have a “wellness practice” (whatever that means) and that they need to see you (for what exactly?) is asking a lot. You need to educate them through specific and targeted advertising plans.

PICK A NICHE

Would you rather have a small percentage of a large market or a large percentage of a small market? While it is tough to have both, usually more is at stake in larger markets (along with larger players).

Niche players or businesses that focus on a well-defined and smaller category of products or services can be extremely successful by owning a segment of the market and being distinct. Time is an example of a mass-market magazine, whereas Guns & Ammo is a niche publication. Niche businesses can be very profitable.

Wellness can have a number of aspects. If you want to expand your business, pick one or two wellness services about which you are knowledgeable, experienced and passionate. Stick to what you know. Research the market. Is the demand there? What is the best method and message to get to that audience?

Even if you are known as a “health-food nut” and talk to all your patients about proper nutrition, that does not necessarily mean that opening an organic health-food restaurant in the office space next door is the best idea. It could work, but then you would be in the restaurant business, not the chiropractic business. These are two very different animals.

SIMULATE

Once you have chosen a product or service, create a business model, including revenue and cost estimates with best- and worst-case scenarios for price points and market response. You need to establish financial benchmarks for the levels of initial investment you will make and return you will get on that investment.

You also need to do an analysis of operations to determine how this new service will affect your current practice (core business) both positively, through cross-promotion, and negatively, through the expense of finite resources like time, energy, opportunity cost and hard dollars. This will help you identify your risks and potential return.

Often in business, if you are not growing, you are dying. The opportunities for chiropractic today and in the future are substantial. Never has there been a bigger market that is more willing to take better care of itself. Position your business, your skills and your strategic plans accordingly, and you will reap the rewards. Moreover, chiropractic will have the impact on society it so justly deserves.

For further information on seminars, workshops and consulting on strategic practice development by Dr. Deters, visit his Web site, www.tomdeters.com, or e-mail him at info@tomdeters.com.