Location, location, location. The old real estate adage also applies to chiropractic practices. Where a clinic is located can mean the world of difference for a chiropractor’s take home pay, ability to grow their practice and quality of life.
However, the best clinic locations aren’t always intuitive, and many require tradeoffs. For example, people are flocking to Denver for access to beautiful mountain vistas, year-round outdoor sports, and a rapidly growing economy. It sounds like the perfect place for a chiropractic business. Yet, operating a practice in a popular city like Denver or Seattle, may come with higher overhead costs for rent and a higher cost of living. If paying down student debt and building financial wealth are top priorities, Toledo, Ohio, for example, could be a more attractive destination.
Before inking the contract to buy a clinic, here are five considerations related to location:
Practice buyers should first take a look at state-level practice regulations and reimbursement patterns. Insurance pays much better in some states than others, which can be critical for doctors trying to put away money and pay off student loans. “In some states, it’s just much easier to put money away earlier in your career,” says Kevin Misenheimer, a broker with Progressive Practice Sales. He recommended Indiana and Alaska as two states where insurance pays chiropractors well.
Density of chiropractors is another important factor at the state and community level. More chiropractors means more competition, and it can also be an indicator of how regulated a state will be, according to Sam Reader, a practice management consultant who works with chiropractors nationwide. “In some states where there’s been a super high concentration of chiropractors for many years, there will be more regulation,” he says. “It’s almost like trying to practice with one hand tied behind your back.”
At the community level, chiropractors should be aware of the overhead costs of running a practice. An annual survey conducted by Chiropractic Economics finds most doctors prefer working in suburban areas where they still have access to a broad patient base, but can benefit from lower overhead costs than urban areas. “In certain parts of the country, there’s a chiropractor on every corner,” Mr. Misenheimer says. “Then meanwhile, there might be a doc making $600,000 a year or more in a slightly more rural area.”
Chiropractors should also evaluate communities based on local employers or healthcare systems that are open to partnerships. For example, practices near military bases can be a boon because TRICARE, the health insurance program for members of the military and their families, reimburses well for chiropractors.
Lastly, when evaluating a practice for sale, chiropractors should consider street-level location factors like visibility and accessibility. A practice that’s not visible from the street will require more marketing and advertising.
Currently popular areas for clinic sales include Boise, Idaho; Scottsdale, Ariz.; and Southern Utah, according to Mr. Reader. “What makes them so popular … is an interesting cocktail,” he says. “A big part of it is cost of living and quality of life.” Beyond the local amenities that make a place attractive are state-, local- and community-level factors that can be a huge part of a clinic’s success.
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