Making chiropractic offices more profitable is crucial for their long-term sustainability and ability to serve the community. Higher profitability also often translates to better compensation and benefits for staff, leading to improved job satisfaction and lower turnover rates.
One way to increase profitability of a chiropractic office is for chiropractors to enter partnerships with fellow chiropractors or other healthcare professionals. So, in this article, we’ll discuss different types of partnerships, their advantages, and key considerations for a successful collaboration.
What is a Chiropractic Partnership?
A chiropractic partnership is a formal arrangement between two or more chiropractors, or a chiropractor and a related healthcare professional, to combine resources, expertise, and patient care services. These partnerships can take various forms, each with its own unique advantages and considerations.
Solo Partnership
In a solo partnership, two chiropractors collaborate for shared duties, responsibilities, and benefits of running a practice. This can include co-ownership, shared decision-making, and the pooling of resources, such as equipment, staff, and office space.
Group Partnership
Group partnerships can bring together chiropractic care and complementary services like Shockwave Therapy, acupuncture, and nutrition, offering holistic healthcare solutions. This allows your chiropractic office to offer more services, attract more patients, and ramp up your profits in the long run.
Associate Partnership
An associate partnership involves a chiropractor joining an established practice either as an employee or an independent contractor, but with certain limitations in terms of their role and responsibilities. This can provide opportunities for mentorship, skill development, and a smoother transition into practice ownership.
Benefits of Chiropractic Partnerships
Chiropractic partnerships offer a wealth of benefits that can significantly enhance the profitability and long-term success of your practice. Here are a few important benefits of teaming up with other healthcare professionals for your chiropractic office:
Increased Revenue, Profitability, and Sustainability
Partnerships can bring together resources, expertise, and patients to boost revenue, cut costs, and create a sustainable business model.
Diversification of Services Provided
Partnerships help you offer more services and meet a wider range of patient needs, bringing in more profit and revenue. Working together with other chiropractors and healthcare professionals can also benefit patient care and facilitate mutual learning.
Increased Bargaining Power
Partnerships can give you greater leverage when negotiating with insurance providers, suppliers, and other industry stakeholders, potentially leading to more favorable terms and pricing. This ultimately leads to increased revenue and profitability for the chiropractic office.
Improved Career Satisfaction
Chiropractic partnership allows partners to have better work-life balance due to shared workload and responsibilities. This also allows chiropractors to pursue professional development opportunities that further foster career growth. Collaborating with like-minded professionals can also boost job satisfaction by fostering camaraderie and a shared sense of purpose.
Finding the Right Chiropractic Partner
Choosing the right partner is vital for the success and profitability of your chiropractic office. When evaluating whether a potential partner is the right fit for your chiropractic office, consider the following factors:
Shared Vision and Values
Ensure that you and your potential partner share similar views on how to manage the practice, including approaches to patient care, treatment philosophies, and ethical considerations. Discuss and align your professional aspirations, such as practice growth, specialization, or community involvement. Agree on expectations regarding work hours, vacation time, and personal commitments to ensure a harmonious partnership.
Complementary Strengths and Expertise
Look for partners whose skills and experiences complement your own, creating a well-rounded team. Identify areas where your partner’s abilities fill gaps in your own expertise, such as clinical specialties, administrative skills, or technological proficiency. Consider how different levels of experience can benefit the practice, with seasoned practitioners mentoring newer ones or fresh graduates bringing innovative ideas.
Compatibility and Communication
Assess your ability to work together effectively, resolve conflicts, and maintain open and transparent communication. Discuss experiences in handling disagreements and establish a framework for addressing future conflicts constructively. Assess each partner’s willingness to compromise and adapt to changing circumstances or differing opinions.
Financial Stability and Business Acumen
Review each partner’s credit history, debt obligations, and financial management skills to ensure a stable foundation for the partnership. Evaluate past involvement in practice management, including budgeting, profit and loss analysis, and strategic planning.
Set financial goals for the practice, both in the short-term and long-term. This includes targets for revenue, controlling expenses, and sharing profits.
Things to Consider Before Starting a Chiropractic Partnership
There’s no doubt that chiropractic partnerships offer several advantages, especially with regards to the profitability of the practice. However, before entering into a chiropractic partnership, it’s important to take the time to carefully consider these key factors:
Properly Constructed Agreement
A comprehensive agreement, drafted by an experienced attorney, provides legal safeguards for all partners. It clearly defines the obligations of each partner, helping to prevent misunderstandings or conflicts.
By including procedures for resolving disagreements, the agreement can help avoid future issues that may cost time, money, and cause stress. This can include mediation or arbitration clauses to handle conflicts outside of court.
The agreement can also include provisions that limit each partner’s personal liability for the actions of other partners or the practice as a whole.
Variable Expenses and Income Distribution
Set clear guidelines for allocating variable expenses and distributing income and profits. This helps foster trust, transparency, and minimizes money conflicts. Make sure to also establish clear policies for major financial decisions. For example, require unanimous partner agreement for equipment purchases using corporate profits.
Professional Liability Insurance and Other Insurance Needs
Ensure that you and your partner(s) have adequate professional liability insurance coverage and address any other insurance requirements, such as worker’s compensation and general liability.
Planning insurance needs in advance helps chiropractors establish a secure and compliant healthcare business. This proactive approach not only protects the practice but also enhances its credibility and long-term viability.
Exit Strategy
Develop a well-defined exit strategy that addresses the process for one partner to leave the practice, including the valuation of the practice and the distribution of assets, to prevent future disputes over practice worth and asset distribution. This allows partners to plan their long-term finances fairly, so neither is at a disadvantage if they separate.
The exit strategy should be flexible, allowing for the waiving of certain clauses if the separation is amicable while providing a framework for worst-case scenarios. Having this strategy reviewed by an attorney adds legal weight and reduces the potential for costly legal battles.
Tax Implications
Partnerships must file informational tax returns and may have additional reporting requirements. Adhering to these regulations is vital to avoid penalties and maintain a positive reputation with tax authorities.
Tax considerations can also significantly affect the overall value of the practice, especially when considering a future sale. Understanding how different tax structures impact practice valuation is essential for long-term planning.
Consult with a qualified accountant to understand the tax implications of your partnership structure and ensure compliance with all relevant regulations.
Building Successful Partnerships With Chiro Success Team
At Chiro Success Team, we understand the complexities and nuances of chiropractic partnerships. Our team of experts is dedicated to guiding you through the entire process, from identifying the right partner to navigating the legal and financial considerations.
Utilizing chiropractic partnerships can lead to increased growth, diversification, and financial stability. With the right partner and a well-structured agreement, you can take your practice to new heights and position yourself for long-term success in this business venture.
Contact us at 561-320-7000 or schedule a consultation with our experienced team to find out how the Chiro Success Team can assist you in building a profitable chiropractic partnership.
