A business plan serves as a roadmap that directs the journey of a chiropractic practice from start-up to successful establishment. It outlines the goals of the business and strategies to achieve them while also providing a clear picture of the business’ financial needs and potential profitability.
The necessity of a comprehensive business plan for a chiropractic business cannot be overstated. It helps entrepreneurs strategize, plan, and manage their business effectively through each stage of growth. Beyond that, it gives a well-structured analysis of the business’ feasibility, aiding potential investors and lenders in making informed decisions.
If you’re looking to start your own practice or you want to restructure the way that you have been operating your business, creating a business plan is an essential first step. Today, we’ll cover the essentials of what you’ll need to include as well as some key considerations you should keep in mind.
Section 1: Determining the Business Structure and Operations
The first section of your chiropractic business plan must clearly outline the structure and operations of the business. This includes deciding whether the practice will be a sole proprietorship, a partnership, or a corporation. Each structure comes with its own benefits and drawbacks in terms of legal implications, costs, and ease of setup.
The operations part of the business plan describes how the chiropractic practice will be run. It includes details about the location of the business, hours of operation, and the services provided. It’s crucial to clearly lay out the operational workflow, from patient booking to appointment scheduling and follow-ups.
Additionally, the plan should detail the human resource needs of the business. The number of staff, their roles, qualifications, and recruitment strategies should be clearly defined. As you grow, you will likely need to hire at least one person to assist you, such as an administrative assistant. Preparing for how you will onboard and manage their responsibilities will allow for a more streamlined process.
Section 2: Market Analysis and Strategy
Market analysis is an integral part of a chiropractic business plan. It involves researching and identifying the target market for the business, their needs, and how the services provided can meet those needs. This process will reveal key demographic information, the size of the market, and the level of competition within the local geographic area.
The strategy section involves outlining the methods to be used to attract and retain patients. The marketing strategy should be in line with the findings of the market analysis. It might include methods such as direct marketing, online marketing, or community outreach.
You cannot create an effective business plan without also detailing a thorough competitive survey. This involves identifying the unique selling proposition of your practice that sets it apart from others that may be targeting the same potential patients. The competitive strategy might involve offering unique services, leveraging advanced chiropractic techniques, or providing a superior patient experience.
Section 3: Financial Projections
While you may start your practice to provide a superior level of care to your patients, you probably also want the business to generate revenue. With projections in hand, you can estimate how much you can expect the practice to earn over time.
Financial projections provide an estimate of the income and expenses of the business over a specific period. These projections help to determine the viability of the business and the amount of capital required to start and operate it. If you are pitching investors or lenders, they will want to know these figures so that they can also determine how long it might take them to see returns from you.
The financial projection section should detail the sources of revenue, including income streams like:
- Service charges
- Product sales
- Premium upsells
- Unit leases, if you are purchasing property
Beyond sources of revenue, it should also detail major expenses like:
- Rent or mortgage payments
- Salaries and hourly wages
- Equipment purchasing and maintenance costs
- Marketing expenses
- Local taxes
- Average utility payments
- Office supplies
Additionally, the financial projections should include a break-even analysis. This shows the point at which the business’ revenues equal its expenses, indicating the minimum performance required for the business to avoid losses. The break-even analysis helps entrepreneurs and potential investors to understand the risk and potential of the business.
Section 4: Risk Analysis and Mitigation Strategies
Every business faces a variety of risks that can disrupt its operations and threaten its survival. These risks can be internal, such as employee turnover or equipment breakdown, or external, like regulatory changes, market shifts, or customer lawsuits. A thorough risk analysis identifies these threats and assesses their potential impact on the business.
Risk mitigation strategies are plans developed to manage or avoid these risks. These strategies may involve diversifying income sources, investing in staff training, setting aside a portion of monthly revenue for potential legal expenses, or ensuring compliance with all regulatory requirements. These plans aim to minimize the damage caused by any risks that do materialize, ensuring the chiropractic practice’s resilience and continuity.
The business plan should also outline contingency plans for your practice. These are plans designed to manage unexpected situations that may disrupt normal operations. They ensure that you can quickly resume standard practices after a disruption, minimizing downtime and losses.
An example of a contingency plan could include identifying a list of potential alternative nearby office locations in the event you are unable to renew a lease at a unit you are currently renting. If a landlord decides to lease your space to someone else at the end of your agreement, or if they raise the rates beyond what you can afford, having other options available in advance can help you pivot quickly and enable you to relocate more quickly and efficiently if the need arises.
Section 5: Legal and Ethical Compliance
In the business plan, a section should be dedicated to outlining how the practice will remain compliant with these laws and regulations. This might involve strategies such as routine compliance audits, ongoing staff training, and engaging legal experts for advice. Adhering to the law is not only necessary for avoiding penalties and lawsuits but also for building trust with patients.
Equally important is the commitment to ethical practice. The business plan should detail the practice’s code of ethics, which outlines the moral principles guiding its operations. The code of ethics might address issues like honesty, patient confidentiality, and professional conduct. Upholding ethical standards is essential for maintaining a good reputation and patient trust.
Section 6: Measuring Success
So once you have launched your new practice and you start receiving new patients, how do you know that you’re actually working toward hitting the financial benchmarks in your business plan?
Defining what success looks like for your practice is crucial for tracking progress and making informed decisions. The success metrics might include financial performance, patient satisfaction levels, market share, or compliance rates.
The business plan should outline the methods and tools that will be used to track these metrics. This could include financial analysis tools, customer surveys, or performance dashboards. Regularly measuring and analyzing performance enables the business to identify areas of improvement, celebrate successes, and make the appropriate adjustments.
Section 7: Sustainability and Growth Plans
Finally, a successful chiropractic business plan should outline sustainability and growth plans. Once you’ve hit a point of success, such as turning a profit, how do you plan to maintain that momentum?
Sustainability involves maintaining the operations and profitability of the business in the long term. It might involve strategies for staff retention, patient loyalty programs, and continuous service improvement.
Growth plans, on the other hand, outline how the business intends to expand over time. This could involve opening new locations, diversifying services, or investing in advanced chiropractic equipment. Growth plans show the ambition of the business and its readiness to seize new opportunities.
Get Help Building Your Own Chiropractic Business Plan with AMC
Fully committed to helping chiropractors run the practices of their dreams, our team at Aligned Mentoring for Chiropractors provides in-depth business coaching for entrepreneurs like you. If you are looking to take the leap into operating your own practice, and you want to build an effective business plan to do so, schedule a discovery session today.