A recent grad went to a bank to discuss a loan for her practice start-up. The bank wanted to know the profits of all of the chiropractic offices in the area.
Of course, this is impossible to get; no chiropractor is going to share profitability information with a new grad, or a bank. What the bank really wanted to know was, “Are the chiropractors in this area making a profit? Or are there too many chiropractors in this area?” Good question, and one you will probably get asked as you present your business plan to a bank.
Here are some talking points you can use in a discussion with lenders who ask this question, either directly or indirectly.
Why there is no such thing as “too many chiropractors”?
“¢ Each chiropractor is different. The USP (Unique Selling Proposition) and specialization of each chiropractor is different; a doctor who specializes in family practice is not going to be competing with a DC who runs a sports clinic. Discussing your USP with the banker may help alleviate the fear that all chiropractors are alike (they aren’t) and that you are competing with all other chiropractors (you’re not).
“¢ Ratios and percentage of the population numbers are meaningless. It is commonly quoted that only “X” (choose a number anywhere from 10 % to 17%) percent of the population goes to a chiropractor. But the number is an average and it has no meaning for a particular area. One county, which has a population highly receptive of chiropractic and its benefits, may see over 20 percent of the population going to a chiropractor, while another area may not see even 10 percent. The percentage also is affected by many other factors, including age of DC’s in the area and new patients who might be attracted to chiropractic by a new, enthusiastic doctor.
“¢ Get the facts and figures. Use Chiropractic Economics’ Annual Salary and Expense survey to show average chiropractor income, comparisons of malpractice insurance rates with those of MD’s, and other statistics, to show that chiropractors are succeeding in practice.
“¢ Look at the number of other professionals in the area. Compare the number of chiropractors to the number of dentists, hair stylists, banks, attorneys, and other professionals. If a town of 10,000 can support 3-6 dentists, it can certainly support that many chiropractors.
Be sure to include a short discussion about this subject in your business plan, and be prepared to deal with this question during an interview with the bank. If you have a strong USP, a specific detailed marketing plan, and the facts and figures to show you can confidently compete, you can overcome the “Are there too many chiropractors?” question.