Chiropractic Coaching: Are You Charging Enough For Your Care?

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Chiropractic Coaching: Are You Charging Enough For Your Care?

*The following is an actual transcript for Chiropractic Coaching: Are You Charging Enough For Your Care?. We do our best to make sure the transcript is as accurate as possible, however, it may contain spelling or grammatical errors.*

Chiropractic Coaching: Are You Charging Enough For Your Care?

Hello everybody and welcome to Thrive in Five. I’m Dr. Dennis Perman and I’ll be your chiropractic coach for today. The subject matter for this Thrive in Five is are you charging enough for your care? And I thought we would begin by revisiting the dumb guy who bought the watermelons. You remember the guy bought 500 watermelons for $500 and he put up a sign by the side of the road that said, watermelon’s a dollar. And his friend comes by and he says, wait a minute, watermelon’s a dollar. That’s what you spent. How can you make any money? And the dumb guy said, well, volume of course.
Well, no. If there’s no profit built into your fee structure, then it doesn’t matter what your volume is, you won’t be making any money. And today, I thought we would talk a little bit about how you can set your fee so that you’re making as much money as you want to make. 

Now let’s take an example where a doctor is spending $12,000 a month on overhead. Now, yours might be more than that or less than that Doesn’t matter. It’s just an example. And let’s say in this example, this doctor works 30 hours a week. That would be 120 hours a month or so. So at $12,000 for the month and 120 hours, it’s costing this doctor about a hundred dollars an hour to run. Now profit is based on how much more than your costs you collect. So if it turns out that it’s costing you a hundred dollars an hour to run, what kind of profit would you like?

Would you like to make twice as much as that, three times as much as that, five times as much as that? Well, there’s no one right answer, but it’s important for you to understand that when you charge for your services, you have to pay not only your overhead, but you also have to pay taxes. So if you’re only getting $200 an hour, that costs you a hundred dollars to run, you’re probably not making very much money because a hundred goes in overhead. And then the tax on that is also 30, 40 bucks. So what are we talking about making 30, $40 an hour? Well, your massage therapist makes more than that. So the key here is to adjust your fee structure so that you’re making enough multiples of your cost so that you are profitable. So let’s see what that looks like. Let’s say you decide that you want to make three times what you spend. This is a base level, two and a half to three times. What you spend is a base level of profitability. So that would mean that you need to generate 300 bucks an hour. 

Well, how can you do that? Well, it depends on how long it takes you for an office visit. If it takes you an hour for the office visit, spoiler alert, you got to charge 300 bucks for the hour. If you take a half an hour with a patient, then that’s Two per hour. That means in order to generate the 300, you have to be at 150 a visit. If you spend 15 minutes with a patient, that means you could do four visits per hour. So therefore you would need to charge $75 a visit. And on down the line, if you can see five visits an hour, then you charge 60 to get to 300. If it’s six visits an hour, you charge 50 to get to 300. But you see how this works. Now, I picked $3 for every dollar you spend as a base acceptable bottom for your profitability. But most practices aim for a higher profit margin, and you probably should too because you see, if you’re fortunate and you’re a good marketer and you’re a good administrator, maybe you have all your hours filled with the number of people you can see. But in most practices, there are peak times where every slot is full, and then there are off peak times where every slot is not full.

Well, you have to do the math to figure out just how much you have to charge based on how much time you spend in a visit and how many visits you have per typical hour, and how many hours you have per typical week that aren’t completely full. So you can come up with a fee structure that fits what you’re trying to accomplish. Now, fee policy is one of our six essential strategies. And the reason that’s important is because if you understand these six essential strategies, then you have a more successful practice. Now I’m going to show you a barcode, which will take you directly to the Practice Essentials, the six Practice Essential Strategies. And I want you to go ahead and run your scanner, run your camera over this barcode, and it will take you right to the landing page that it explains the six essentials of a legendary practice.

Now, why is this important? Well, you want to help as many people as you possibly can, and you want to make as much money as you possibly can, and this is the shortest distance between those two points. So what I’m going to recommend that you do is go ahead and take a photo of this QR code or just when it’s up here like this, just run your scanner over it and your phone will take you directly to the websites. You can learn more about it. Each of us has a responsibility not only to support ourselves and our family, but to do as much good as we possibly can. And the six essentials is one of the ways that you determine what the definition of doing as much good as possible looks like in your practice. As always, we want to make sure to help you in every way we possibly can. So I want to thank you very much for dialing into Thrive in Five. This is Dr. Dennis Perman from The Masters Circle Global signing off for now. The Masters Circle Global where legends are made and legendary practices are built through chiropractic coaching. Thanks for watching.

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