The Hottest Topic in Chiropractic: Exit Planning
Introduction Exit planning might be the hottest conversation no one in the chiropractic profession is having. While chiropractors focus heavily on starting and growing their practices, many overlook planning for what’s next. But an exit is inevitable, whether it’s retirement, selling your clinic, or transitioning out of the business for other reasons. This post will explore why exit planning matters, common mistakes chiropractors make, and actionable steps to prepare for a successful transition.
The Chiropractic Journey: A Snapshot Many chiropractors enter the profession through personal or family experiences. Angela, a chiropractic industry veteran, shared her story of being introduced to chiropractic at 14 after experiencing back pain during volleyball season. Her family, including grandparents, relied on chiropractic care regularly. This early exposure inspired her journey, which eventually led to decades of experience in chiropractic marketing, business development, and acquisitions.
Stories like Angela’s highlight the profession’s deeply personal roots. However, as the industry grows, it’s essential to evolve from these individual connections and explore broader strategies for sustainability and growth.
Why Exit Planning Is Crucial Angela emphasizes that exit planning is inevitable: “An exit is going to happen for all of us. Whether we like it or not, we’re not going to make it out of this world alive—and neither is our business.” Yet, many chiropractors wait too long to consider their exit, often when they’re burned out and their clinic is underperforming.
Without proper planning, chiropractors risk losing the value they’ve spent years building. Angela notes, “Unfortunately, we have to value a business in the present moment. If your clinic is at its lowest point when you decide to sell, your valuation will reflect that.”
Common Mistakes in Exit Planning
- Failing to Plan: Many chiropractors don’t start thinking about their exit until they’re ready to leave, which leaves them unprepared.
- Waiting Too Long: Often, chiropractors wait until they’re burned out or the clinic’s performance has declined, which negatively impacts valuation.
- Poor Financial Records: Without clear and organized financials, the due diligence process becomes difficult and delays potential deals.
Steps to Prepare for a Successful Exit
- Start Early: Begin planning 5–10 years before you want to exit. This gives you time to make strategic decisions and implement changes.
- Document Processes: Create clear documentation for all processes—from patient intake to billing. This ensures a smoother transition for the new owner.
- Decentralize Yourself: Transition from being the central figure in your practice. Delegate tasks like marketing, billing, and scheduling to staff or outsourced services.
- Organize Financials: Work with an accountant to prepare accurate profit and loss statements, understand key performance indicators (KPIs), and identify areas for improvement.
- Consider Partnerships: Explore options like merging with a group practice or partnering with organizations that can help grow and support your clinic.
Valuation in Chiropractic: What to Expect Valuing a chiropractic practice isn’t straightforward. While some use a multiple of revenue, Angela explains that seller’s discretionary earnings (SDE) or EBITDA are often better indicators. SDE considers profits plus any personal expenses run through the business (e.g., car or phone).
Angela shares that valuations can range from 0.8x to 1.6x SDE. For example, if SDE is $100,000, the clinic could sell for $80,000 to $160,000. “It’s not the tech world where businesses sell for 20 times revenue,” she notes. “But with proper planning, chiropractors can still achieve a rewarding exit.”
Why Consolidation Is the Future Angela believes consolidation is a positive trend for the profession. “Let doctors be doctors. Running a clinic involves so many hats: business management, staffing, marketing, billing. Consolidation allows chiropractors to focus on patient care while offloading administrative burdens to larger organizations.”
Organizations like Curis Functional Health offer unique models where chiropractors can maintain clinical autonomy while benefiting from shared resources and ownership in the larger company. This aligns incentives and creates opportunities for long-term growth.
Key Takeaways
- Start Thinking Early: Don’t wait until burnout to consider your exit. Begin planning years in advance.
- Delegate and Decentralize: Reduce your clinic’s dependency on you to improve its value and transferability.
- Get Financially Organized: Clean, accurate financials are critical for a smooth transition and a favorable valuation.
- Explore Options: Whether it’s merging with a group, selling to a private buyer, or joining a larger organization, find the path that best fits your goals.
Final Thoughts Exit planning is about more than just selling your clinic—it’s about securing the legacy of what you’ve built. By starting early and taking proactive steps, you can ensure a successful transition while maximizing the value of your practice. As Angela puts it, “The best time to start planning is now. When the timing and buyer are right, you’ll be ready.”