Adding new income streams, when they’re evaluated strategically and shown to enhance the business as a whole for the long run, can be an excellent way to strengthen your practice.
Many DCs are exploring additional revenue income streams with more niche services and exciting new technology available than ever before. Maybe you’ve seen a colleague successfully add a service, or you spotted an impressive device at a conference, and you’re wondering if you should bring something new into your own practice. The motivation is often a mix of improving patient outcomes, expanding the scope of care and increasing income. But before moving forward, the key question to ask is “Will this strengthen (or weaken) my practice as a whole?”
It’s easy to assume anything that improves care or brings in extra income is a good addition to your practice. But in reality, the wrong additions can complicate a practice, make it harder to manage and reduce cash flow. Without a strategic plan, you risk creating a disjointed practice instead of a cohesive clinic that grows in strength and value. Here’s how to avoid that outcome.
Are the basics in order?
Every time you consider a new income stream, start by asking yourself these questions:
- What does it contribute in each of these areas: Revenue, patient loyalty, reputation or improved patient outcomes?
- What will it cost in each of these areas: Money, doctor time, staff time, clinic space?
- How many times must I deliver this each month to cover its cost? To meet profit goals?
- How long before it pays for itself?
- Can staff or associates take this over once it’s been implemented or will some part of this rely on me personally forever?
Weigh your answers carefully. Does the new idea make sense logically? Is your gut response to this information positive or negative? How do you think you’ll see the revenue stream a year or even five years down the road? If the idea still holds up after this initial check, it’s time to dig deeper with some strategic questions.
What legacy do you want to build?
Take time to clearly define your core patient care philosophy. Is it a commitment to evidence-based care, an emphasis on cutting-edge longevity and wellness treatments, a focus on efficient, cost-effective treatments or something else entirely? Your philosophy should be your compass for deciding which services, products and programs you offer, so anything you add to your practice connects directly with it. If the new service doesn’t align with your philosophy, your clinic can come off looking disjointed, or worse, money-driven. That misalignment can strain resources and also alienate your “true believer” patients most aligned with your core philosophy who would otherwise be the most loyal over the long term. Losing them means losing not just revenue, but also the professional fulfillment that comes from serving the patients who are the best fit for your care model.
What will it really take?
Adding a new service isn’t just about the cost of the equipment or program. There’s also a lot of time, effort and money that goes into learning about it yourself, training staff, educating patients and building reliable systems so it’s delivered consistently. After getting it off the ground, you’ll likely need to continually invest in marketing, supplies and staff time. And, in some cases, you may even need additional staff or more space. This can add up to a lot, which is why even the best ideas can backfire when it takes too much to get a new revenue stream running consistently. So, determine your needs upfront and then ask yourself if you really want to invest the time and money (and go through the trial and error) it will take to make the new service a profitable addition to your practice.
What could you do instead?
Before adding something new, compare that investment to opportunities to invest in tools and services to effectively do more of what you already do. For example, a platform that automates patient follow-ups can increase conversions, reactivations and retention, which boosts income without the burden of learning and marketing a new service.
What could go wrong?
It’s easy to get caught up in the excitement of a new income stream and focus only on the upside. But asking, “What could go wrong?” helps you see risks clearly. So before you commit, pause and consider the following questions:
- Do my patients actually want this?
- What hidden risks am I missing? Could this trigger compliance issues, confuse patients or make the practice too dependent on any single source of success?
- What could go wrong?
What are the long-term returns?
Profitability matters but so does practice value. The foundation of that value is transferable profit, which is the take-home income a buyer can reasonably expect after taking over. If a service requires special licensing, complex training or doesn’t appeal to other DCs, that revenue may be excluded from a future buyer’s valuation. So, ask yourself how many DCs could step into your practice, easily understand and provide that service and want to continue it?
This may not feel urgent if exiting your practice seems far off, but one of the most common regrets I hear from doctors moving into retirement is “I wish I would have known this sooner.” It’s truly best to start the way you want to finish.
Unique, niche services can be rewarding in your early and mid-career, but as you move into the final decade of practice, you’ll want to ensure a significant portion of your income is widely transferable. The more you build early with long-term value in mind, the stronger your practice will be when it’s time for it to pay you back for all the risk and responsibility you’ve taken on over your years of ownership. And designing a practice with long-term value in mind also improves your life now. A practice built to sell produces consistent profits, runs smoothly and is enjoyable to own; benefits that are wonderful now and attractive to buyers when the time to exit eventually comes.
What is my endgame?
Continuing with the idea of starting with the end in mind, it’s strategic to align any new revenue streams with your future exit model. When you’re clear about the legacy you want to leave, the value you want to build and the exit strategy you’re working toward, it becomes much easier to see whether a particular income stream will be supportive of your goals or just a distraction. And depending on your endgame, the right income streams will look very different. While there are no hard and fast rules, and there is always room for exceptions, here are some general guidelines on building revenue streams for common exit strategies:
- Open market listing: Public listings usually move fastest when they appeal to the widest buyer pool, so simplicity is key. Buyers want profitable, easy-to-run clinics that aren’t dependent on one doctor’s expertise. Widely understood add-ons, such as decompression, shockwave or laser therapy, fit well in this scenario.
- Investor sale: Private equity and investors often seek streamlined, straight chiropractic practices that can be adapted easily to the investor’s model. They prioritize room for growth, scalability, replicability and predictable systems. They tend to avoid niche offerings heavily tied to a doctor’s personal expertise.
- Absentee ownership: For absentee ownership to work, income streams must be simple and systematized. Ancillary therapies staff can deliver independently and perform well, while complex integrations or niche services often collapse without direct oversight.
- Associate buyout: When training and mentoring an associate to take over, niche services can be a great fit. This is a strong path to preserve specialty techniques, but it requires a strong commitment to mentoring and developing the next generation.
Final thoughts
In today’s evolving healthcare landscape, diversifying income streams isn’t just a financial strategy; it’s a proactive step toward long-term practice resilience. When thoughtfully assessed and aligned with your mission, these additions can elevate patient care, enhance operational efficiency and secure your practice’s future. The key is strategic integration that supports your clinical goals while strengthening your business foundation.
Crystal Misenheimer, CBI, CM&AP, a leading expert in chiropractic practice sales, is the first and only chiropractic broker to earn the coveted Certified Business Intermediary (CBI) designation from the International Business Brokers Association (IBBA) and sets the gold standard in expertise, quality and service. A former clinic owner, she is uniquely qualified to provide comprehensive support on the complexities of clinic valuations and practice sales. Contact Misenheimer and her team at 888-508-9197, marketplace@progressivepracticesales.com or online at progressivepracticesales.com.
