๐๐ฉ๐ง๐๐ฅ ๐๐ฃ, ๐ฉ๐๐๐จ ๐๐จ ๐๐ค๐๐ฃ๐ ๐ฉ๐ค ๐๐ ๐ ๐ง๐ค๐ช๐๐ ๐ง๐๐๐… [๐ผ ๐๐๐๐ฉ๐ ๐๐๐ฅ๐๐ง ๐๐จ๐จ๐๐ฎ]
For 10 years I was practically the โposter childโ for an associate based practice. I owned 8 offices with no less than 30 associates at any one time for all those years.
Since then I’ve consulted with easily over 300 practices on an intimate personal level, having reviewed more financials in the form of quarterly and annual profit and loss statements, balance sheets, scorecards and numbers than just about anyone on the planet in the chiropractic space.
I have seen ๐X๐C๐L๐ whether or not it’s โworth itโ to hire associates and the following in-depth โspecial reportโ should help guide you as to whether hiring an associate is right for you and or financially viable and the common pitfalls to avoid.
๐ฐ๐ ๐๐๐๐๐ ๐๐ ๐๐๐๐๐ ๐๐๐ โ๐ ๐๐๐๐๐๐๐๐๐โ ๐๐ โ๐๐ ๐๐ ๐๐๐๐๐ ๐๐โ ๐๐๐๐; ๐พ๐ฌ๐ณ๐ณ, ๐ฐ๐ป ๐ซ๐ฌ๐ท๐ฌ๐ต๐ซ๐บ!
๐. ๐๐ก๐๐ญ ๐๐ซ๐ ๐ฒ๐จ๐ฎ ๐ญ๐ซ๐ฒ๐ข๐ง๐ ๐ญ๐จ ๐๐๐ก๐ข๐๐ฏ๐:
Generally when I ask a chiropractor why they want to hire an associate I basically get a variation of one, or both of the following;
1) ๐ผ ๐ค๐๐๐ก ๐๐๐๐ ๐ก๐๐๐, ๐๐
2) ๐ผ ๐ค๐๐๐ก ๐๐๐๐ ๐๐๐๐๐ฆ! ๐๐
3) ๐ผ ๐ค๐๐๐ก ๐๐๐กโ more time and more money …
Which basically translates into, I WANT LESS STRESS!
A common misconception is that hiring an associate will give you any of the above (more time, more money or less stress). In fact, in my experience, the overwhelming outcome in the majority of cases is less time, less money and more stress. There is a
tipping point where it changes more favourably for the practice owner, which I address towards the end of this โwhite paperโ.
๐๐๐ญ’๐ฌ ๐๐ซ๐๐๐ค ๐ญ๐ก๐๐ญ ๐๐จ๐ฐ๐ง…
๐๐๐จ๐จ ๐๐๐ข๐:
Everyone underestimates just how much time and mentoring it takes to get an associate to grow. Then take into account that this associate needs nurturing, a shoulder to cry on during โdark daysโ, time off work when the cat goes missing and phone calls explaining how they wont be able to make it in because of an unfortunate altercation on a night out that has resulted in them having a โsleepoverโ at the local law enforcement establishment aka jail.
Yip I’ve had it all and so will you. Additionally much like a parent child relationship, you will not only deal with โthat stuffโ but also cop ALL the flak should they not succeed.
๐ป๐๐ ๐๐๐๐๐๐๐ ๐๐๐ ๐๐๐ ๐๐๐๐;
*๐๐๐ก ๐๐๐๐ข๐โ ๐๐๐ค ๐๐๐ก๐๐๐๐ก๐ ,
*๐๐๐ก ๐๐๐๐ข๐โ ๐ ๐ข๐๐๐๐๐ก,
*๐๐๐ก ๐๐๐๐ข๐โ ๐๐๐ฆ,
*๐๐๐๐ ๐ ๐ก๐๐๐,
*๐๐๐๐ ๐๐๐๐๐๐๐ข๐๐๐ ,
*๐๐๐๐ ๐๐๐๐๐๐๐ โ๐๐ ๐๐๐ ๐กโ๐ ๐๐๐๐๐ …..
Of course this doesn’t mean that some of the โcriticismโ isn’t justified, as we are all bound to make mistakes as we are all learning and growing as business owners, but rest assured they will certainly let you know where you’ve โmessed upโ, perhaps to your face but certainly behind your back, after all, everyone is full of advice when they have not attempted it themselves.
๐๐จ๐ข๐ง๐ญ ๐ข๐ฌ, ๐ญ๐ก๐ ๐ซ๐๐ฅ๐๐ญ๐ข๐จ๐ง๐ฌ๐ก๐ข๐ฉ ๐ซ๐๐ช๐ฎ๐ข๐ซ๐๐ฌ โ๐๐๐๐โ.
More patience, more time, more training, more investment, more new patients and the likes, than you initially anticipated. I’m not saying it won’t be worth it, but it requires you to understand that and even more importantly, them to understand that also, and stick around long enough to give themselves a chance at succeeding.
๐ณ๐๐๐ ๐ด๐๐๐๐:
This is intrinsically linked to the changing market over the last 10 years. When I started as an associate over 15 years ago I got paid a 30% flat rate commission on what I saw. I still made more money than 90% of the associates I see today because it’s quite simply a โEat what you killโ / โthe more you see the more you make” model, which suited me.
In reality, percentage has very little to do with making a lot of money as an associate. After all 100% of a pittance is still, a pittance!. The onus is still on the associate โto do the businessesโ.
Having grown up in an entrepreneurial family, I felt blessed to get paid a whopping 30% AND not have the โriskโ or responsibility associated with owning a business. That’s essentially 30% net profit. VERY few businesses operate at those profit
margins.
An NYU report on U.S. margins revealed the average net profit margin for SME (small to medium enterprises) is 7.71% across different industries. They went on to state that their โrule of thumbโ was that 5% is a low margin, 10% is a healthy margin, and 20% is a high margin.
In my experience a profitable single practice owner’s median net take home is anywhere from 30% to 60% net profits. Of course there are those that make โhigher marginsโ but that’s just a rule of thumb. Also worth noting that someone might see 20 patients a week, have no Chiropractic assistant and practice off the side of his house and make 90% net profit. My point remains, 100% of a pittance is still a pittance!
๐๐ก๐๐ซ๐ ๐๐ซ๐ ๐๐ข๐๐๐๐ซ๐๐ง๐๐๐ฌ ๐๐๐ญ๐ฐ๐๐๐ง ๐ญ๐ก๐ ๐๐/๐๐๐๐๐๐ ๐ฏ๐ฌ ๐๐๐/๐๐๐๐๐๐;
It’s pretty simple. There is a supply and demand issue across the world but it’s at least 10 times more exaggerated in the UK/Europe simply due to the fact that there are so few colleges.
For context, a few years back the official statistic was that the UKโs general chiropractic registrarโs net gain, taking into account the amount leaving the profession due to retirement and other reasons and new registrants joining the profession after qualifying was less than 20 chiropractors across the entire country.
Let that sink in for a second.
At the time I remember thinking that I personally could have, and would have hired every single one.
Because of this it has had a knock on effect to the industries โexpected payโ. It’s simple economics. Much like the housing market, if supply is down, then prices go up.
In short the supply of associates โworld wideโ but specifically in the uk/europe is way down which simply means the commissions they are โdemandingโ is going up.
As a rule of thumb I’ve seen associate pays in the USA being between 30% to 40% while the pay for associates in the UK has spiralled totally out of control. I’ve personally seen practices headhunt associates from other practices with offers of up to 70% flat rate with the mean being between 40% and 50%.
Quite honestly in some cases it is totally unsustainable to continue to pay associates what they are demanding. The maths simply doesn’t work.
Unfortunately, because of this I predict that more and more practice will simply opt to not hire associates, and who can blame them.
This doesn’t mean that you can’t make it work with associates but you must go big or go home. In my opinion, and from the vast examples I look at on a daily basis, It’s become almost essential to be a 7 figure practice, to make it โworth itโ.
๐๐ก๐ ๐๐๐๐ญ๐ก ๐ญ๐ซ๐๐ฉ ๐จ๐ ๐๐๐ข๐ง๐ ๐ฌ๐ญ๐ฎ๐๐ค ๐ข๐ง ๐ญ๐ก๐ ๐ฆ๐ข๐๐๐ฅ๐!
Too big to be small, too small to be big. Is the single biggest mistake, as it simply leaves a practice owner too exposed when an associate flies the proverbial nest. The key to making it work is โaddโ.
In truth the number of associates is even more important than the amount of visits they see. 2 associates that see 250 a week is as โexposedโ as 2 that see 50 a week. Actually you would argue that you’re even more exposed as the chances of you finding a like for like replacement within the allotted 1 -3 months notice period is
practically impossible.
๐ ๐ฌ๐ฎ๐ ๐ ๐๐ฌ๐ญ ๐ ๐ฆ๐ข๐ง๐ข๐ฆ๐ฎ๐ฆ ๐จ๐ ๐!
Why 5, because out of 5 associates, typically 2 are higher performers, 2 are โsteady eddies” and one needs to get kicked to the curb faster than the babysitterโs boyfriend when the car pulls up.
Assume 3 of the 5 are โleavingโ, at any one time. I also want to set the context that โleavingโ is not always a bad thing. Everybody leaves. Doesn’t mean it’s on bad terms or not exactly the right thing for the business and individual for them to leave but let me repeat that EVERYBODY LEAVES. Stop running your business without a โbenchโ, it is bound to catch up with you eventually .
๐ ๐ง๐จ๐ญ๐ ๐จ๐ง ๐๐ข๐ ๐ก ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ซ๐ฆ๐ข๐ง๐ ๐๐ฌ๐ฌ๐จ๐๐ข๐๐ญ๐๐ฌ1
What do ambitious high performers do? THEY LEAVE. That’s the very nature of being a high performer. If you’re reading this, and you own your own practice there is a good chance โyou leftโ. My point exactly!
๐๐ก๐๐ญ ๐ฅ๐๐๐ฏ๐๐ฌ ๐ โ๐ฌ๐จ๐ฅ๐ข๐๐ฌโ ๐๐ค๐ ๐๐ญ๐๐๐๐ฒ ๐๐๐๐ฒโ๐ฌ.
In my experience, here is the breakdown of the โsteady eddyโsโ
One we love, they’re great for culture, and actively participate in the business and add value to the practice and clients. The term โsteady eddyโ is somewhat harsh as they are probably more than carrying their weight and there is a win-win relationship where they are profitable for the business and add to the culture and they are rewarded as such. Many will make more money as an associate than they will as a practice owner and wisely choose to not to open a practice as it’s โjust not for themโ.
The other โsteady eddyโ is your โunderperforming steady eddyโ that needs even more nurturing to get them to a place where they are profitable. This โunderperformingโ is often excused if they are a good culture fit. Just be careful not to โexcuseโ this for too long because we โlike themโ. I know it’s hard but remember you’re running a business and it still needs to be profitable. The biggest risk is if they lack patience and fall to the โblame you gameโ to justify their reasons for not succeeding.
๐๐ก๐๐ญ ๐ฃ๐ฎ๐ฌ๐ญ ๐ฅ๐๐๐ฏ๐๐ฌ ๐ญ๐ก๐ ๐ฅ๐๐ฌ๐ญ ๐จ๐ง๐, ๐๐ค๐ ๐ญ๐ก๐ ๐๐ก๐ข๐ซ๐จ๐ฉ๐ซ๐๐๐ญ๐ข๐ ๐๐ฌ๐ฌ๐จ๐๐ข๐๐ญ๐ ๐๐ช๐ฎ๐ข๐ฏ๐๐ฅ๐๐ง๐ญ ๐จ๐ ๐ ๐ฌ๐ฅ๐จ๐ญ๐ก!
Sorry but it’s true not just for chiropractic associates but ANY sales team. Statistically the bottom 25% of any sales team needs to go!
I recently heard an interview with Barbara Cocoran from the wildly successful show โShark Tankโ. She says that the secret to her success that led to her growing one of New York’s most successful real-estate firms that she founded in 1973 with just $1,000 and eventually sold in 2001 for almost $70 million, was that as a rule she would fire the bottom 25% every year.
Here is a quote from an recent interview she did with an online entrepreneur publication:
“๐ผ ๐๐๐๐ค ๐๐ ๐กโ๐ ๐๐๐ก๐ก๐๐ ๐๐ข๐๐๐ก๐๐ ๐๐ ๐กโ๐ ๐ ๐๐๐๐ ๐๐๐๐๐ ๐ค๐๐ ๐’๐ก ๐๐๐๐๐๐๐ ๐๐ก๐ ๐๐๐๐, ๐ผ ๐ค๐๐ข๐๐๐’๐ก ๐๐ ๐๐๐๐ ๐ก๐ ๐ ๐ข๐๐๐๐๐ก ๐กโ๐ ๐ก๐๐ ๐ ๐๐๐๐ ๐๐๐๐๐๐ ๐คโ๐ ๐ค๐๐๐ ๐๐๐๐๐๐ ๐๐๐ ๐กโ๐ ๐๐๐๐๐ฆ.”
๐๐๐ค๐ ๐ฌ๐ฎ๐ซ๐ ๐ฒ๐จ๐ฎ ๐๐๐๐ญ๐จ๐ซ ๐ข๐ง ๐ญ๐ก๐ ๐ก๐ข๐๐๐๐ง ๐๐จ๐ฌ๐ญ!
This is very relevant for you to factor in for all your โSteady Eddyโsโ and โsloths”. Be careful to over simplify your justification for โkeeping themโ by thinking only in terms of โbreaking evenโ or that you’re still making a small profit off them. Good chance you’re not factoring in the lost income out of sheer wastage that occurs because they are diverting new patients away from the stars. An inconvenient necessity to help them grow and learn, but still an irritating โloss makingโ exercise .
๐๐ฒ ๐ ๐ฒ๐๐๐ซ ๐ซ๐ฎ๐ฅ๐ ๐๐ง๐ โ๐ญ๐ก๐๐ฒ ๐๐ซ๐ ๐๐ญ ๐ญ๐ก๐๐ข๐ซ ๐๐๐ฌ๐ญโ ๐ซ๐ฎ๐ฅ๐!
Not a science by any stretch but it’s scarily accurate. I usually regard an associate as a โflight riskโ if they have either been with me for more than 2 years and or they are โat their bestโ.
๐ ๐๐๐๐ซ ๐๐ฎ๐ฅ๐;
My rule has always been that if an associate has been with you for more than 2 years, then you are in โbonus territoryโ. You should in that case consider putting the contingency measures in place, or plan as if they are not going to be around for all that much longer. Of course there are exceptions, as I also had in my business, with some associates staying for over 10 years in total but trust me, 2 to 3 years is โitchy feetโ territory.
๐๐ก๐ โ๐ญ๐ก๐๐ฒ ๐๐ซ๐ ๐๐ญ ๐ญ๐ก๐๐ข๐ซ ๐๐๐ฌ๐ญโ ๐๐ฎ๐ฅ๐:
I once heard an interview from the chef that has statistically trained more Michelin starred chefs than anyone in the world. He was asked by the interviewer if he ever got rid of these โstarsโ. To the interviewer’s surprise he said โwhen they are at their best I immediately get rid of themโ.
Although we don’t want them to leave, the nature of a โtop performerโ is that they begin to want to do things โtheir wayโ and begin to have ideas of their own that they want to โexpressโ or think they can do it โbetter than youโ. I’m not knocking that, it’s
actually part of what you โneedโ to be successful. It’s what drives entrepreneurs to take on the risk and do it themselves.
My experience is that they begin to channel their unmet entrepreneurial frustrations towards โyouโ. Not purposefully. It’s Simply a coping mechanism, but they are often irritable, grumpy and morose at the โthey are at their bestโ phase. It’s simpy time for them to โfly the nestโ, and the culture often improves when they go. Chet Holmes said it brilliantly in his classic sales book โthe ultimate sales machineโ when referring to top โsales people”. He states that while we are all hoping for โtop sales peopleโ, the very โegoโ needed to perform as a sales person doesn’t always mean they are the easiest to work with. He states that you can’t have your cake and eat it. Frankly there are times that โstarsโ can also be a โpain in the arseโ.
Again I know first hand, I was one. I was a nightmare to employ, and since have self diagnosed myself as โunemployableโ. I’m an outstanding entrepreneur. I may suck at a lot else but I am excellent at what I do, having grown 2 separate multi-seven figure businesses from scratch, in completely different arenas, by the age of 39. But you would never want to hire me, I would drive you insane. Hence why I’m so grateful to have found a wife like Natalie that puts up with me
So if you factor in the โ2 years ruleโ the โI’m at my best rule and should leaveโ and the โbottom 25% must goโ rule you can probably assume that near 70% of the associates are flight risks in the next 12 months.
That’s why I feel that 5 is the minimum you need to slightly de-risk yourself. One of my most successful associate practices in my inner circle mastermind started working with me on about $900k per year with about 5 associates and is now a smidge away from 2 million dollars a year with about 8 associates and making 35% + net profits. Impressive! Must have a pretty good coach
๐๐ข๐๐๐ฌ๐ญ๐ฒ๐ฅ๐ ๐จ๐ฉ๐ญ๐ข๐จ๐ง๐ฌ-
The above explanation is very heavily weighted towards commercial considerations.
If that isn’t the biggest concern for you then, sure, there is nothing wrong with 1 associate but make sure you are clear on the the fact that the โoutcomeโ is more about the feel good, nice energy, good karma, little extra money and perhaps and maybe a little extra comfort when you take time off.
๐๐จ ๐๐ข๐ ๐จ๐ซ ๐ ๐จ โ๐ฌ๐ข๐ง๐ ๐ฅ๐ ๐๐จ๐โ!
Here is my opinion NOT FACT. However before I give my opinion, let me remind you that it is a pretty well measured opinion. I am just about the most well placed person on the planet to give my opinion on this matter and here is the single biggest deciding
factor whether to go the associate route or simply practise by yourself.
๐๐จ๐ฎ๐ซ ๐จ๐ฎ๐ญ๐ฉ๐ฎ๐ญ ๐๐๐ข๐ฅ๐ข๐ญ๐ฒ!
Meaning, if you’re a doc that can, and wants (both must be present) to see above 250 visits and more a week then I strongly suggest you continue on that path. You will make more money and have less stress. Invest the available resources and capital (there will be alot) in building a robust supporting team. Focus everything on making your output and potential to see more numbers even greater and or making your life in practice easier while maintaining higher numbers to allow for longevity.
If you’re wanting to โgo for itโ with associates then you need to do it as though it makes commercial sense for you to make enough money and live comfortably without you โadjustingโ at all in the practice. Even if you never plan to stop adjusting, it will guide you to the scale that’s needed for it to be a viable option long term and whether you would want โthat scaleโ or amount of associates and staff.
๐๐ฎ๐ข๐ฅ๐๐ข๐ง๐ ๐๐ช๐ฎ๐ข๐ญ๐ฒ.
Last thing to consider. It might be that you are willing to sacrifice net income now, to build equity in the practice by hiring more associates which SHOULD increase the value of the practice on an exit. This is NOT the clear cut case in the chiro market.
Not because you’re โwrongโ, but because of the lack of liquidity and trade in the chiro market. This differs slightly in the USA as there are some private equity players buying up practices.
This is a great thing for the market because everyone’s practices are worth more since there are some players who are actually willing to pay what they are worth. This has not yet happened in the uk market but in my opinion all practice owners in the UK SHOULD be hoping it does, as it will begin to create trade and
equity in the market.
๐๐จ ๐ญ๐ก๐๐ซ๐ ๐ฒ๐จ๐ฎ ๐ ๐จ…
My 2 cents on the industry’s associate space. I hope it serves to
guide you and most importantly shows a clearer path to a model that gives you fulfilment. Some of you reading this should never embark on a practice with multiple associates and a big staff base, while others reading this will be happier doing so. It’s about self awareness.
Either way, a gloriously abundant path lies ahead whether you choose to hire associates or not!
Lastly, should you think I can help you create that gloriously abundant practice and life, please do reach out. I have after all helped many many docโs triple their practices and I would love to help you do the same!
I’m rooting for ya!
Love and light
Ryan