We may not know for certain if the nation is yet facing the “Big R” (recession), but there is little doubt we are in the midst of tough economic times.

And as individual discretionary incomes shrink, it is more important than ever for chiropractors to strengthen their business and shore up their customer base.

Because the operations side of the practice is often not your area of expertise, this may seem like a daunting task. But experts agree that with a little marketing knowledge and a touch of business savvy, you can successfully weather the potentially rough and uncertain waters ahead.

“The same things that make a practice successful also can make it recession-proof,” says chiropractic financial consultant Stanley Greenfield. “Just keep doing what you did to build your practice and now do more of it. The ones who do this will continue to thrive, and when things get better they will be the leaders of the pack.”

KNOW THYSELF

One of the first things you should do is analyze your finances.

“A critical aspect to recession-proofing is to first do an internal audit of your existing business — from a financial standpoint you need to know where money is coming from and where it is going,” says Tom Dorr, director of the Western Washington University Small Business Development Center in Bellingham, Wash.

Three major areas often put on autopilot are insurance, marketing, and billing.

When it’s time to renew insurance, shop around, don’t just renew, Dorr advises. Understand the kind of coverage you need, know what your policy offers, and see where you can get the best price and service.
Next, check your marketing practices to be sure you are getting a good return on your investment. Though many chiropractors funnel a large portion of their marketing funds into the Yellow Pages, Dorr says he knows few people who choose a chiropractor by letting their fingers do the walking. Be listed; just don’t buy a quarter-page ad.

Finally, Dorr recommends considering an outsourced billing service to reduce costs and improve cash flow. A good billing service has a working relationship with insurance companies; the service is accurate; insurance pays more quickly; and a chiropractor is more likely to collect on insurance payments, Dorr says.

“I can’t tell you how many doctors leave money on the table if they don’t bill correctly or accurately and have to rebill,” he adds. “This hurts cash flow.”

BE BUSINESS-MINDED

Employing a billing service can also allow you to replace some administrative staff, which can save money.

Though cutting staff may not seem like a pleasant idea, a recession is not the time to get too emotional about your company, according to Andrew Horowitz, owner of Horowitz & Co. — a financial-planning and investment-advising firm based in Weston, Fla.

“The fact is that by trimming the fat now, you can save from big headaches later,” he says. “If you can do with less staff, do it. If you can postpone ordering supplies, do it.”

Horowitz recommends reducing excess contracts, and company luncheons can go. If possible, eliminate an unnecessary phone line or service, get an automatic thermostat for heating and cooling, and review all vendor contracts for pricing and terms.

During this time it may be instinctual for you to let payments occasionally slide in order to keep customers.

Don’t even think about it.

“There is a tendency for businesses to start to allow for more and more ‘credit’ to customers, but that will only hurt the business,” says Horowitz.

When cash is crunched, people quickly learn to juggle their financial obligations and often pay the squeaky wheels first. Horowitz says it is important to be understanding of client’s financial difficulties while still being firm. Now is the time to shorten the period before actively pursuing late payments and be squeaky when necessary.

LOOK BEYOND YOURSELF

If business starts to slow, the staff will likely be worried about their jobs. Instead of keeping them in the dark about the business, get them involved.

Make sure every team member understands the benefits of chiropractic and emphasize the financial implications of losing just one or two patients. Clue them in and allow them to help.

“Staff should be ever-present to dissention, disappointment, and patient concerns, and voice this to the chiropractor early on,” Horowitz says. “Make sure staff is friendly and personally engaging with patients. This way, when a patient calls to cancel, the front line can discuss
the advantages lost if they do not come in.”

Employees can also help find ways to save money. Ask them to look at their daily tasks to find ways to make reductions and improvements. Allow them to assist with fashioning a more creative schedule when possible.

Could there be days where they could cut back or shift their hours?

Now might also be a good time to consider either bringing in a partner or renting space to another chiropractor, Horowitz suggests.

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