Living the dream–no, for real – Part 2: Managing your money

imageOK, that got a little long.  My apologies!

Where were we?  Oh yeah–money, and trying to save it.

My partner and I lucked out.  I’d been a licensed massage therapist in private home-based practice for about 3 years prior to starting chiropractic school, so, anticipating this point in our lives from that far back, I worked like a dog through undergrad (and the first couple trimesters of chiro school as well) to save up a really decent amount of money.

Add to that our decent money-management skills and, well, we were among the lucky ones who graduated with a bank balance in the black.

While we were in school, we assumed that opening our own practice from scratch was NOT the route we were going to take.  We figured it would be too nerve-wracking, so even though we knew we wanted to have our own practice soon, we operated from the mindset that it’d be best to work with/for someone else for a while first.

This way, we could hone our adjusting skills, make beginner mistakes under a name other than ours, figure out how an office runs in real life, learn how to really recruit and relate to patients, and start saving the necessary funding.

Ha.  My how things change.  We met our mentor who taught us everything I mentioned before, and before we knew it, we were pouring over commercial properties for lease instead of job openings.  Life often takes unexpected turns; be ready for anything.

While we were waiting for our licenses, we started designing our own paperwork.  We went to seminars – neuro, Functional Medicine, pediatrics, and adjusting.  Those classes gave us the much-needed confidence we new docs often seriously lack.  We prepared–hard, often staying at the office until sometime between 10pm and midnight, having arrived between 10 and 11am and worked straight through lunch.

The biggest thing to remember is, SAVE YOUR MONEY.  I’m talking mainly to the newly self-employed here.

Also, if you can, try to avoid taking another job.  If you have to take a part-time job, do Saturdays at Whole Foods for decent pay, decent benefits, and a discount on good groceries, or work with another doc (not too close to your office, but not too far either), whether adjusting or just doing exams.  You’ll keep your hands warm and you’ll be forced to interact with people.

The WORST thing you can do is hole up in your office, scared to move, alone with a calculator, locked into a number-crunching frenzy, freaking out over finances and overhead, going further into the red, all the while meeting no one and driving yourself to insanity.

I know what it’s like to be nervous – been there.  Just when you feel like hiding in your office, you need to force yourself to leave your office.  Put the calculator away.  And meet people.  Start with your office space neighbors.  This way, you can introduce yourself not as a nervous peddler of services, but a neighbor.  Go in with the intent of making a friend, someone who can hold your FedEx packages for you or whose phone you can use when your power goes out.  Be a good neighbor first and foremost.

Figure out exactly what you will need on Day One.  We actually sat down and made a list of conditions we can help with (i.e. figuring out our first target markets) and then we brainstormed for all the supplies/equipment we would absolutely need to help with those conditions.  We didn’t think too big on this one – sure, we might have an interest in working with people with brain injuries, paralysis, stroke, seizures, etc, but we’re not prepared to do that yet, so we shouldn’t market to them yet.

This also means we won’t need that equipment yet.  Carpal tunnel and food allergies, on the other hand, we were confident we could help.  When you visualize your practice while still in school, you think in terms of theory, because none of it is real.  Well, now it IS real, for the first time.  You may have had a grand vision of 10 years in the future, running full boar and treating everything under the sun, but chances are, you’re not there yet, so you have to step back and ask yourself, what can I do TODAY?  What are you confident about?  What do you have internship experience with?  Start there.  Then, put it to the test; if such a patient walked into your office RIGHT NOW, what would you do with them?  Visualize that, from start to finish–the handshake, the paperwork, the history-taking, the lab work (how would you order the lab test?), the exam, the report of findings, the treatment plan, the treatment itself, the spiel for follow-up treatments, offering to reschedule, the whole nine yards.  This is infinitely easier if you have a mentor that you can shadow a few times.  My partner had one for spinal adjusting; I didn’t have one for Functional Medicine.  I had a lot of work to do when it came to managing cases and my entire side of the practice.  In fact, I’m still tweaking it.  Time management is the biggest issue for any new doc; learn to manage it well, and early, so that patients don’t develop an expectation that you’re always going to spend a long time with them.  You might be able to spend an hour and a half with them now, but this won’t be the case for very long.

Go bare bones for a while.  Once you’ve figured out what you absolutely need Day One (adjusting table, paperwork, a computer and printer, phone, desk, chair, exam equipment, lamps and other furniture, etc, get it as cheaply as possible.  Amazon is good, as is Craig’s List if you know what you’re doing. Always do your research and beware of scams.

When going to make a Craig’s List exchange, bring someone with you and try to meet in as public a place as possible.

Everything you don’t absolutely need Day One, shelf it for a while. You can always get it later.  You don’t need the expensive art or big TV for the waiting room just yet.  You don’t need a second phone line yet, a view box yet, or big fancy rehab equipment.  Wait till you’ve made some money first.  For things we didn’t need on opening day, our philosophy is, once the business has 1) demonstrated a need and 2) brought in sufficient money to fund it while meeting other upcoming bills, then we make the purchase.

Next item – you’re going to suddenly feel very popular.  People will crawl out of the woodwork and magically know you exist, but they’re not prospective patients–they actually want YOUR money.  They’re salespeople.  They’ll try every trick in the book to sell you anything under the sun.  You’ll be visited by many Ghosts of Chiropractic Future–nutritional supplement companies, Acai juice MLMs (pyramid schemes), advertising guides/magazines, bulk mailers, office supply retailers, credit card machine vendors (multiple), and even some lab companies.

If you’re interested in their products/services, cool – give them your time, but put a cap on it, say 30 minutes.  One lab rep actually had the audacity to TELL me he was going to need at least an hour and a half of my time.  I denied it, allotting an hour instead, which is generous.  Having learned from that experience, I now cap anyone trying to sell me anything at 30 minutes.  My philosophy is, my own patients, who are paying ME, get 30 minutes of my time at a time, why should someone who wants me to pay THEM get any more than that?

When salespeople come in, don’t forget to spend just as much time talking about your own business.  Always have the meeting at your office, not theirs, because this sets the stage nicely for you to start off with a tour of your office, during which you explain all the services you offer.  “Here’s our front lobby; we don’t like the word ‘waiting room’ because that sounds like such a cattle call”, and “here’s our massage therapy suite over here; massage therapy here isn’t a feel-good spa experience, per se, but we can deal with the serious cases like post-car accident or sports injury – it’s called medical massage and it’s often covered by insurance”, and “here’s our treatment room here with nice lighting, i.e. no fluorescents, and we have special cushy drop tables that absorb a lot of the impact of a spinal adjustment so that you get the results without feeling all the force”, and “here’s our PT area where we’ll do active rehab using a Wii Fit – who says you can’t play video games at your doctor’s office??” etc.  The tour is surprisingly quick and by the end, you’ve just nonchalantly promoted every one of your services.  The salesperson may never come see you, but they know where you are located and they know what you offer, and you never know who they’ll tell, especially if they like you.

When presented with products or services, especially those involving commitments or contracts, never, ever, ever make a decision on impulse.  Take time to look over the contract.  Ask questions.  Don’t worry about being a pest or taking up their time; they came to you, remember?  They have something to sell you, and they have a commission to gain from your business.  It’s your money and money is typically finite, but the number of people seeking to get their hands on some of it are not, so make sure you spend it wisely.   Make sure you’ve obtained satisfactory straight-up answers to every single question.   If you don’t understand an answer or their reasoning or a procedure, have them clarify or explain again.

And, ALWAYS make sure to compare multiple offers.  This is especially true for things like advertising mediums or credit card processing machines.  Lots of money and long contracts are involved, and there’s a wide variety in the quality of terms, contract, equipment, support services, etc.  Go with your gut, no matter how insignificant or “overreactive” it seems.

Avoid pitfalls such as: high credit card percentage/rental terms, MLM (pyramid) companies, service contracts on printers, supplement companies who devote more literature space to sales rewards and perks than to genuine product info, supplement/equipment/lab companies who drag their feet when it comes to producing genuine third-party peer-reviewed research to support their products/services, companies who diss their competition, PR/marketing firms (trust me, the average startup DC is not big enough for that, nor are we usually prepared to handle the kind of sudden traffic a media blitz will generate), people who don’t follow up or return phone calls (or conversely, people who won’t leave you alone and keep checking on you every other day), lab companies who are all-too-eager to bill the patient’s insurance for you (especially if you’ve expressed that you’d like to bill their insurance yourself), landlords who push their contract on you without considering any of your own wishlist items, or anyone who gets defensive when asked a tough/sensitive question.

Ways to cut costs: as mentioned, shop Amazon and Craigs List.  IKEA can also be good (the quality can be surprisingly good; you just have to evaluate each item for itself, as not all are created equal), but the best we’ve found are local stores and warehouses.  There are many good used furniture warehouses, usually located in light-industrial parts of town.  Find them on the internet or via word of mouth.  You can save lots of money by buying used.  The only things we didn’t buy used were our tables; our protocol requires uncommon features/design, so we had to custom-order them.  We went to our local tourist trap for our cultural office decorations.  They were surprisingly inexpensive and we got some neat items that contribute spashes of color throughout the office.  Shop sales (especially during holidays like Memorial Day, Presidents Day, or Independence Day), order items together to combine shipping costs, etc.  You’d be surprised at how much the savings can add up.

More ways to save: forgo hiring any employees just yet.  Yes, answer the phone yourself, or if you have a partner with a flexible schedule, have them come in and help you.  Employees are expensive, even at minimum wage without benefits – and good luck attracting even the bottom of the barrel with that.  We got a voice mail system and explained to our patients that in order to provide what we do at the reasonable cost we charge and to keep it that way, we need to keep overhead low, which means forgoing a front desk assistant for now, and in the event that they call the office and both of us docs happen to be seeing patients, to please leave a message and we’ll call them back as soon as we get done.  Everyone’s been real cool with that.  As for adjunct staff, hire massage therapists, personal trainers, PTs, etc, and make them all independent contractors.  You can’t dictate their schedule or how they accomplish what you want them to do, but you save on the withholding taxes and you don’t have to pay them during downtime when they’re not doing anything.

Last, do accept credit cards. We went back and forth on this idea, at first deciding not to because of the costs involved, but ultimately deciding to go forward with it when our mentor said: “make it easy for people to pay you. Soon you won’t even notice the fees involved.  You won’t even care.”

Up next: how to add MORE money to the pile – once you’re open, how do you get those patients?

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