Blog, Chirosecure Live Event February 6, 2024

Chiropractic Malpractice Insurance – Will Your Location Kill the Value of Your Practice?

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Hey everybody, Dr. Randy Ross here, CEO of Premier Practice Consultants. Thank you for joining me here today and thank you to ChiroSecure for inviting me to share some important information with you. Today we’re going to talk about something, it’s one of the handful of questions I get asked. When we talk about the potential point of selling your practice at some point in your career.

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And people often ask me, does location matter? Just like in many things in life location can have a big impact. on the potential sale of your practice at some point in your career. So one of the things that we talk about is, different various, geographic or regional areas.

And anything else, and this is cyclical, it could change like right now. With all the migration we have leaving the east and west coast, there are some states that are a little less popular and there are some that are a little more. For example, on the west coast, California is somewhere that people are migrating away from, not, don’t have friendly business practices and, the expense of living there and so on and so forth.

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So that’s something we’re seeing people leaving. Another point which you’ll all know is Parts of the Northeast. So if we’re talking about, New York, New Jersey, Connecticut, there’s the migration pattern from the Northeast. So again, this conversation could change in five years, but right now those are states that are a little bit harder to potentially have a sale in.

Doesn’t mean that you can’t sell there. It just means there’s less people that are moving there. Usually, it’s what I refer to as internal sales. People that already live in that region, or someone has family for themselves or their significant other, and they want to be close to their family, especially if they have a young family themselves, being attached to grandma and grandpa sometimes is a motivating factor for people to relocate.

The plus for some states right now that are very much in demand are on the East Coast. Places like the Carolinas, Georgia, and Florida. If someone has a practice in those States at this point in time, there is a good chance you have a higher potential for selling. On the, more towards the West coast, migration is a little bit more Texas, Arizona.

And a few other places. There are, listen, other regions, Kentucky and places that people seem to be moving to. There’s probably various reasons for relocation. One is cost of living. The other sometimes has to do with the politics of a state, makes it more or less business friendly. And the other thing might have to do with getting a license in that state if you’re someone that’s relocating.

The flip side of that is always thinking about, alright, so now we’re, we just talked about states a little bit when you’re making those decisions. What about, should I be in a particular city or town? Like anything else, if you choose to set up your practice in a much more populated area, now whether that’s within a city, or a suburb of a city, the potential for selling in the future is definitely going to be higher.

There’s a greater population. There’s usually a, great family value when living in these communities with good schools and things like that. And there is also, the point to I to understand that in these particular regions, there’s more job potentials for someone significant other. So those are important things to think about, so I don’t want to be right in a city, like you don’t want to be in New York City, not now anyway, but can you be in the suburbs?

I don’t want to be right in Charlotte, which it’s a little too populated for my taste, but I’d like to be in one of the suburbs or, conversations like that. A little, a part of Austin, Texas, that’s maybe not right in the heart of the city. You’re a little outside again, more suburban, more family guided.

So when you’re thinking of where would I like to practice, These kind of things should enter your mind, as opposed to what I just described, if you go to a real rural area, because you want to live, on 50 acres, or you want to have a farm, or something like that, because that’s the lifestyle that you would like.

You have to remember, in the back of your mind. There’s a good chance that when I am ready to retire, unless for some reason that area really develops over the next few decades, which can happen. But if it stays relatively the same, there’s a good chance that your practice would either be hard to sell or it might not sell at all.

Again, is it a particular region that’s very far from everything? Is it also maybe not have great schools? Is there just a small demographic? If the whole town or county has a couple of thousand people, there’s not a lot of business to draw from. So again, just a few things to think about.

An example that comes to my mind, something I’m sure none of you ever heard of, There’s a county way upstate New York called Skahara County, and a friend of mine’s parents had a country place up there we used to go to in this little town called Byrne. Great place, probably, if you wanted to just be a relaxed Chiro practicing a couple days a week, but there’s no way anybody’s ever buying your practice in these little remote regions.

It’s just chances are it’s not gonna happen. These are all things that you think about, state wise, and should I be in a city? Should I be in a suburb if I want, again, more of that rural feel? How far do I go? Am I going into a rural area that, has plans for development?

You could actually go and talk to, if you’re opening something, city planners. will have massive amounts of information of, is there a road coming in? Is there a kind of parkway or interstate expansion? Are they adding gas stations, believe it or not, as a big indicator of growth? And these are all things that they can share with you.

So if you see that an area that’s a little more rural that you prefer to live in and raise your family, but there’s potential growth down the road, That kind of changes the ball game and changes the playing field a little bit. One of the other things that people often ask me about is, as far as what kind of structure does it matter?

Does it matter if I’m in, here in the Southeast, we have public shopping centers probably, every mile. Do I want to be in a public shopping center? Do I want to be in a small strip mall? Do I want to be in more of a medical complex? Do I want to be in a freestanding building?

What about in a house, a home office and all of these things definitely play a part. One is it something that you can own? Obviously, building your wealth is a great thing, a great way to increase that, especially as a younger person. to build wealth for your family is to, if it’s something that you can own, is it a condo in a medical complex?

Is it a small freestanding building? Is it a co op that some strip malls now are divided into co ops that you can own? Or, is it a public shopping center? You’re obviously not going to own that. So that’s important to keep in mind. Is this something that I could potentially own and have that also either in my retirement, as residual income, or possibly what’s very popular is selling your practice along with the real estate.

Again, a home office, that’s a very specific kind of buyer, unless it happens to be a home that’s really more of in a, on a main road that they could turn if they wanted to into a totally kind of commercial space. Those are just the different laws that you need to know. In some places where you have a home office, the person that owns the building actually needs to reside.

within that structure. Always. Always important to do your research, don’t just make a decision based on emotion, it should be a business decision. So no matter where you plan to set up, do your homework, do your demographic studies, learn about the schools, what businesses are there in the area, are you in a more.

But maybe, sounds terrible, but maybe there’s a bunch of prisons and you get all the COs as patients. There’s, you have to do your research to determine not only Hey, I want to be in this town that might work in certain parts. In other words, if are from Southeast Florida. And you say, Hey, I’d love to be in Boca Raton.

We understand that there’s not as much research that needs to go into that, but aside from these very well known, very populated kind of regions, you really want to do your research and don’t make it an emotional decision and whatever you decide. Realize that those decisions may impact the ability for your practice to be marketable.

And you might not care about that. You might want to go live on a farm somewhere in Kentucky. And build up a great practice and be successful for 30, 40 years and be happy with that. And that’s okay, you don’t feel like you have to sell anything. But always a good thought to have, because as we’ve had in previous conversations and classes that I’ve hosted, sometimes your exit strategy is not by your choice.

And there are times in life when people have situations that force them to put that practice on the market and need to recoup the income. from a potential sale. So I hope that helps give you a little bit of information and as you go out and whether it’s your first practice that you’re opening or even buying or an an additional practice, or maybe you’re relocating your family from somewhere, keep all these things in mind, do your research and make sure your decision is not emotional.

This is a business acquisition. You want to make sure that you’re thinking with the business. Minded part of your brain and do your research and make the right decisions for your future. If anybody has any questions, you can feel free to reach out to me. Happy to have a conversation with anyone that maybe is not sure how to navigate some of these things.

That’s it for today. I’m Dr. Randy Ross, CEO of Premier Practice Consultants, and I hope that you have a fantastic day.


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