Helping A Chiro Scale Past 6 Locations | Ep 818

This is Raymond. He owns 6 chiropractic clinics and he does about $5 million a year, and we're going to help him scale.

So, hey, Alex, my name is Raymond Kuhner. I own Chiro First of Washington. So we're a chain of chiropractic clinics in the greater Seattle area. So just a little bit about my business. We currently have 6 brick-and-mortar locations in the greater Seattle area, trailing 12-month revenue $5.2 million, EBITDA of around roughly $1.2 million, and our net profit is about 23%. Do you buy those or do you open up organically? So far I've bought all of them.

Oh, really? Okay.

Yeah. But I think moving forward we're going to change our strategy a little bit.

Yeah. So, so who do you help specifically?

So our, our key demographic that we help is 35 to 65-year-old men and women that have some kind of condition that we can help with, whether it's pain, discomfort, or loss of movement.

So any kind of like income level or anything like that?

Yeah, they need to be employed.

And insurance or cash?

We're about 75% insurance.

Oh, interesting. Okay, got it. So how do you help them?

So the way we help them is when someone comes into our office, we'll design a custom treatment plan for them that might be over a period of 60 to 90 days. It might include chiropractic rehab and spinal decompression.

Okay.

So spinal decompression kind of differentiates us from a lot of our competitors because it's a niche service that we offer for people that have disc-related injuries.

Is that like stretching people out kind of thing?

Yeah. Okay, exactly.

Cool. Well, how do you make money first?

So basically on the front end, we offer a free consultation.

All right.

So then when the patient comes in, our packages can range from $2,400 to $3,600 over a 60 to 90 day period.

Okay.

We're primarily a recurring revenue model.

Mm-hmm.

And roughly 1 out of every 7 of our patients, they come in for a larger case value. So like a car accident or a work injury. Might be worth up to $10,000.

Okay. What's, what's advertising? How do you find them?

So for paid advertising, the two means of advertising are number one is Facebook ads. So we spend about $1,000 per location on that. The second one is Google ads. So we're spending roughly $500 to $1,000 per month on each location. Okay.

So what's sales velocity? How many do you sell per month?

On average, we're getting about 35 leads per month. Okay. And out of the 35, we have 28 that show.

Okay. It's pretty good.

And so we have a show rate of about 80%.

That's great.

And our closing rate is about 71%. So total sales probably roughly around 20. Cool.

Solid numbers. Okay. So what's the goal?

My 3-year goal is to try to get to $5 million EBITDA. I want to try to build a business that can run individually, but then I also want to entertain selling to institutional buyer.

Okay. So this is very much up your alley, what we talk about. Okay, so that's the goal. So what's, what's standing in the way? What's the problem?

So if I were to prioritize my constraints, what I think they are, number one, I would say is probably lead flow. I think that we could do better in that department. It's not consistent.

Okay.

When I had one location, it was really easy to predict that and to, to change the outcome pretty quickly. But as we've scaled, I'm having a tougher and tougher time, you know, scale the marketing. Right. So I would say that's like a big one for us. Second one would be like our sales infrastructure because we are 75% insurance-based. There's so many different plans out there, right? So when the patient comes in, we have to determine what kind of insurance they have by verifying it and then make a customized plan based off of that. So if there's a way to streamline that into one day, I think it would be much more effective for us. When I personally practiced, I was able to do it in one day, but I'm having, I'm having a tough time training my doctors to be able to do that.

Okay.

Number 3, scaling issues. So decentralizing the marketing has been a challenge for us. Um, limited employee pool, right? So right now we're not expanding, but when we do expand, it's harder to find a doctor, obviously, than a regular—

because you're buying it from another, you know, person who's leaving, correct?

Yeah. And then I got to put one of my guys in there. So the, the hiring pool is a lot smaller for me than it would be for, um, other people. But that's not an issue right now. I don't think it's a It's a pressing issue for us until we start expanding.

Yeah, got it. Okay. And then people operations.

That's people operations. So obviously when I had one location, it was really easy to control the standard, right? But as we expand, it's harder and harder to have that same standard.

So let's see the numbers.

So going over the numbers again. So top line revenue, $5.2 million last 12 months. Profit, $1.2 million. Net margin is about 23%. Our CAC is about $700,000. Our lifetime value is $3,400. So that's 4.8 to 1 LTV to CAC ratio. Marketing spend, we're spending about $1,500 to $2,000 per location right now. The show rate's 80%, close rate's 71%, and our annual ad spend on marketing is about $110,000.

Huh, okay. Do you have anything broken out between channels? Between Facebook and Google?

I do.

Okay, sweet.

So this is our, our Facebook data, I was able to put together like our 12-month numbers for all the clinics for Adam. Okay. And then for as far as the challenge that we have is because we're insurance-based, we don't get paid for like 30, 60, 90 days after. So I had to go back and I picked Q2 for 3 clinics. Yeah. Okay. So these are the numbers for, for those 3 clinics in Q2.

Okay. So why is Kent so much better?

Yeah, I don't know. That's, that's, that's what I want to replicate. That's where we don't have consistency.

Is that your first location?

That's our number one, yeah. It's not our first location, it's our third location, but it's probably our number one right now.

Is the doc there different than the other docs? Is he good at sales?

They're about the, no, he's good, but he's about the same. I would say that culture of that team is really good. I think that's one thing that stands out.

Yeah, because if you look at, 'cause CAC is, I mean, you know, half of Capitol Hill, right? Yeah, but the amount of money that you're making is like you're getting it more, you're getting more LTV and lower CAC at Kent, right? So are they set like, is it that the people that are coming because it's insurance? So is it that they're like, like they're billing better? Like what? Like how could they get LTV to be so much higher?

Yeah, great, great question. So Kent would have a higher proportion of those $10,000 cases I was talking about because that's blue collar and then Capitol Hill is white collar. So it's got less of those. Case averages that are really high. I would say that's one thing.

Interesting. Do you have any other markets that are in that kind of blue-collar damage?

Everett's right there as well.

Hmm. Well, then based on that, would we have more like ROAS? Because the CAC's, you know, close and ROAS is a quarter. So.

Right.

Why are the— why are there so many more cases in Kent than Everett? Yeah. So I take it—

I would say Everett has more of those 10,000 cases than Kent does. That makes sense.

Interesting.

So I didn't calculate that into the Facebook marketing and the Google.

Oh, so you didn't include that. Okay. But Everett's a good market.

It's a good market for those, but I don't like to be too dependent on one source of location, if that makes sense. Like, I don't want to be too heavy on those auto accident cases in the location.

Got it. Okay. Do you have any other data that you've collected together?

This is our Google data. Yeah. So this is from Google AdWords.

Well, these obviously do significantly better than your Facebook ads.

Yeah, for sure.

Interesting. All right. Are you, are you maxed out on spend here?

I don't think I am. I work with a third-party company on this and I basically go off their recommendations. Okay. I personally would love to spend more obviously on this because the return is so high.

Yeah.

And these people are in, you know, immediate need of help. Yeah. So they're much easier. Case acceptance goes up much higher with these patients.

High intent.

Yeah.

Yeah. Really good. Well, I mean, shoot, this is, this is the most promising part. Okay. All right. Let me think about some other, other kind of— walk me through the sales process.

The sales process. Yeah. So we have a 2-day process, right? So day 1, patient comes in, we do a consultation, we take X-rays, we'll do an exam.

And actually, start me from click to close. So the person clicks on— is Google— is basically the sales process for Google Ads different than the sales process for Meta? Or how's it, how's it flow for you?

Yeah. So Google, they will call directly into our— we have a centralized call center.

Okay.

Yeah.

So the call is click to call.

Is the ad click to call or to schedule on our web? If they go to our landing page, you know what the split is?

Is a lot of it call or is like, I'm just curious.

Yeah, I don't know the answer to that. No worries. Yeah, that's a good question.

Okay, so click to call or they self-book.

Got it.

So then they talk to a rep that's centralized. That rep does some sort of discovery call. Correct. Like triages them and either says— I mean, do they, do they look at their insurance at that point on the call?

They don't. But that's the thing I'm thinking of adding in so we can get on top of that.

Keep going through it. So they, so they do some sort of discovery. They're currently not doing insurance on the call.

Yep.

All right. So then they do what?

So then they schedule them the next available time. We try to get them in same day or next day right away.

What's the show up rate for the calls? Because the show up rate that you have here, what you showed me earlier was really good, but that's because they also just got it. They got— they had a conversation prior to doing that too, right? Okay. So what's the show rate for that other step?

So for the—

for the call, right? Because obviously some is click to call, but the ones that book onto your calendar, you then call them at the designated time.

Yeah. No, they just schedule. They can schedule online and then they can make—

they can show up to the facility.

Yeah, we just take them.

Oh, okay.

Yeah, I try to reduce as much friction as possible.

No, I dig it. Okay. That makes— that makes more sense to me. Okay. Got it. So. Some people call and then they book them and the people who self-schedule just book directly.

Exactly. Yeah.

And then what's the, what's the kind of like reminder sequence there to make sure that because you have really good shop rates.

Yeah. So we do 3 text messages and then we do a phone call. If we, if they don't respond to text message, we do a phone call the night before to confirm and then we'll do another one like, you know, 2 hours before their appointment.

Okay. So 3 reminders and call if they have not confirmed their appointment and follow-up call as well if they didn't pick up the first call or the other ones. And then if someone doesn't hit any of those 5, do you pull them off the calendar?

We don't pull them off the calendar, but we kind of expect them not to just like double book.

Kind of.

Yeah, exactly. Exactly. Okay. Yeah.

Okay. So then they come in, so they show up to the appointment. Now what?

They come in for their appointment. We'll do a consultation so that we have a patient coordinator that does it, that gets the preliminary data. Okay.

So it's like an assessment.

Yeah.

It's like movement, like move here. Does that hurt? That kind of thing. Like circle where you have pain.

Kind of like half your closure framework. Okay. So like, so they'll do the first half of that on there and then, then we'll take X-rays, we'll do an exam. and then we'll tell the patient that, hey, we need to process these films or these X-rays, and then we need to get you back in tomorrow so we can go over the results of the X-ray.

Yeah, that's really— listen, people.

Yeah, that's— yeah.

Okay.

And then so then we'll release them for— we'll still do treatment that day. We'll do a light treatment and then we'll have them come back the next day. And by then, by then we'll have everything verified and then we'll have a customized plan for them and then we'll present the financial.

Yeah, I got some stuff there. Okay. So I'm going to say it back to you.

Yeah.

So disco call that gets them booked. Reminder sequence, 3 texts, 2 calls only if they don't confirm via text. They show assessment, clarify whether they're labeled a problem, overview past experience. Then you take them through some X-rays and whatever tests that you're going to run. Then you do some light delivery and say, hey, you know, come back tomorrow and then we will sell you the package. Correct. And then, and then whatever. And the people who you do that service for upfront, do they pay anything like the 10 to 15% that don't actually come to the sales appointment?

Yeah. Yeah. So they'll still pay like usually they'll have a copay.

Yeah.

So that's why we have to verify all that information. Right. So it's kind of— it gets complicated with the insurance. It was just cash would be so easy. But because the insurance is there, we have to, we have to verify if they have coverage and then we'll charge them a copay. And it's different for every single person. But our cash fee for that would be like $99, for example.

Okay.

Yeah.

Okay, got it. What's the— you said you're running 23% margins. What's the— what are the— what's the best facility run? What's the worst facility run margins-wise?

The best facility run right now, I would say, is Kent. Out of these ones, or you have the 6, go back 1 or 2.

There should be 6 on there. Yeah, just to have the list. Okay, so we had all of them there.

So our 2 lowest performing are Auburn and Federal Way.

All right.

Our 2 top performers right now are Kent and Everett, and in the middle are Capitol Hill and Bellevue.

Okay, so what's— what are the margins for the top 2, like net margins for the facility?

Net margins for top 2 are probably over about 40%.

Okay, so that's what it should be. Okay, got it. And what's revenue at those 2?

Those are annual. Yeah, about $1.5 million.

Got it. That's what you want. Yeah, that's— so those 2 you're happy with because if you're running— you're running $600K-ish in profit, right, on those times 2. So 1 point— oh shit. Well, that's most of your profit.

Yeah, yeah, yeah.

And then the other 4 kind of just like—

Yeah. And just a disclaimer, like these, these other like Auburn and Federal Way are like my newer locations. So like the ad— so my unit is probably even higher than this, but it's just the first 6 months we had to eat a lot of profit.

How old?

Auburn is about a year old and Federal Way is about 14 months. Hmm.

Okay. Can you walk me through the ad funnel with the Facebook ads?

So go back one or just— or do—

no, this just right here. Yeah. So just so just like we walk through the sales process, Yeah. Can you walk me through the funnel from the Facebook ads?

Yeah. So like from when they click on an ad. So we have a video ad out there.

Do you have ads live right now?

Yeah.

Can you pull up Facebook Ads Library? We're going to pull them up and we're going to, we're going to see it. We're going to see it. We're going to see for ourselves.

All right.

So we have different creative. It looks like it's the same copy. All right. So I think there's probably just some work that could just happen on the actual ads themselves. Like, I think you can have a clear call out. And the first line, I would probably separate the call outs. So it's like attention, effort, and surrounding areas. So instead of saying areas, I would go to like residents or something like, are people— basically combine the two. Whereas chronic back pain doesn't have to be a life sentence. Attention, effort, surrounding areas. So be like attention, effort, like residents with back pain that combines both lines. Punchier. Put two asterisks on either side. It's like, okay, that's what it is. And you're putting proof first. And I probably wouldn't here. I'd probably lead with a question, which would be like, Are you— so either I would lead with a question that'd be some sort of like more specific pain, or I would lead with the offer and then have the proof of why they should believe that I can help them after they've seen the offer. Because like it took us all the way down to actually see what the offer was. And the headline, avoid surgery, try spinal decompression. I would probably just put like the offer there. So it's just like a restatement, like free spinal treatment, decompression, you know, free spinal decompression.

Boom.

99, whatever, something like that's probably what I would, what I would put there because I think it's just like there's a lot of words and I think you could probably get just like I combined the first, the headline and the next sentence into just like attention Everett residents with back pain. It's like, boom, we got that. And then it's like you'd be amazed at how much like just changing, tweaking the headline, probably compressing the copy into a handful of bullets. It's like, do you struggle with boom, boom, boom, boom? And you've probably tried boom, boom, boom, boom. But there's a better way. This is how we do it. We've helped this many people for a limited time. We're doing X, Y, and Z. And I think, I think that would probably work well. I cannot guarantee availability as we accommodate 10 vouchers after a patient schedule. I do like that. Probably be compressed. We can only see 10 new patients per week.

Right.

And scheduling availability is first come, first serve for this treatment. Done.

Do you think it's good to go? Like, because with Facebook, right, like people aren't necessarily going on Facebook and Oh, my back's hurting. I got like, you know, Google AdWords. It's like, oh, my back's fucked up. I need to call somebody.

I think so. There's tons of chiropractors advertising on Facebook. Yeah, tons.

Yeah.

So I don't think— yeah, I don't think there's any issue with advertising on Facebook for sure. Got it. What's the landing page look like?

So the landing page— so it's just that Instaform, that form on Facebook, right? And that goes to a calendar on GoHighLevel. Okay.

Okay.

And then they schedule on like we have.

So there's really not even a landing page. It's just like they're going to lead form straight to basically redirect to scheduler.

Scheduler, and then we double book for Facebook because the show is lower for Facebook. So basically we give them like certain times in the day where they can schedule. So they'll schedule their own appointment and then we put it into our— then we have to manually put that into our schedule, right?

Oh, you manually— you have to like basically transfer them over into this, into our EHR. Yeah.

Yeah.

Okay.

Got it. Because it's not connected to our EHR. Okay.

Understood.

So that's for Facebook. Google's a little different. Google will be kind of like this, like where they can schedule. Online.

On a page, you mean?

Yeah.

But okay, so you want to get $5 million in EBITDA, you're doing $1.2 million. Basically have to get the other $4 million to be profitable. There's a couple of things that I think we can go over in terms of sales process, lead magnets, things like that. Honestly, I think a big part of it that's not up here is the ops, because in this type of business it's so operational heavy in terms of like kind of operational excellence. It's probably because like you absolutely can run a 10 to 1, 15 to 1, you know, ROAS. Well, you're already doing it on Google, but you can do that on Facebook. Hook as well if the offer is right. And so right now the offer is like there really isn't one. It's just like, try this thing. It doesn't even say free. And so I think, yeah, so let's do that. Why don't you come over here and then we'll walk through game plan. All right. So got a lot of like there's inconsistent lead flow. There's the sales process that I would look at. I think the discovery process needs something. Need a better front-end offer. Increase ad spend. So those are, those are the really tactical things that I'll walk through. But I still want to talk about ops. So if we have these, these 6 locations, what would you say? Like, are the team structures the same between all 6? Is the business model the same between all 6?

Yeah, identical.

Okay. Identical model. Got it. So the people coming in are different. That's part of why the LTV is different. And so in terms of the individual location operators, If you had to power rank them like 1 to 6, who's the best? Okay. Is the doc kind of like the manager of the location? Is that kind of how it works?

That's kind of— that's what we're relying on right now. Okay.

Why don't you just show me? Why don't you walk me through with the actual, like, what the model looks like and we'll do the boxes and then we'll talk about the acquisition stuff.

Like the org chart?

Yeah.

Yeah. So the doctor should be the—

So doc's here. Okay. Got it.

And then underneath them is like a team lead. Okay.

Like an office manager kind of thing?

Yep. Yeah, I guess you can call it. We don't call them that, but—

Yeah, sure. Yep.

And then there's just usually a scheduler and a rehab tech that That's it. So I'm trying to, I try to keep it to 4 employees per location.

I like that. So you've got a schedule. So basically lead nurture, are they remote or they in person?

So this is a scheduler for when they come into the office. I also have a remote team that does all the inbound calls.

And that's centrally?

Yeah, central.

Okay.

Yeah.

Got it. So that's it. Like that's the, that's the model.

All right.

I mean, shoot, really, what do you have to pay the docs?

They make between base of $80,000 a year, but they probably like our top ones making like over $150,000. Okay.

And do they get some sort of like profit share or something like that?

Yeah, I offer— they range between 10% and 20% net profit.

Okay, that's good. That's— I mean, that's usually what I, what I like to have, especially for like a high skill thing. Profit. That makes sense.

Question on that though. Do you recommend getting— like, I try to get them equity. So because I want them to come along for the ride, or does that cause— I mean, that would increase our EBITDA obviously, because it wouldn't be payroll. That 20% would go under. It would improve our EBITDA, but then it also gives them ownership. Or would you not recommend doing that?

Well, if you think about equity, right, you've got, you've got cash flow. So like distributions, you've got sale. Like if you sell, there's value from that, there's risk, and then there's control. So like, that's what equity gets you right now. They're not going to get control because you're the one who owns it. You're going to be making decisions. Doesn't really matter, right? They probably don't want the risk.

No.

Okay, so then it just comes down to them getting paid on a sale and then getting distributions in the meantime. You already have this one. If you want, you could include something called a profits interest because you probably have LLCs for each of them.

Yeah. Yeah.

And so this would be something that basically functions equity-like so that if they sold, they would get whatever percentage of the profits interest. It'd be like, okay, we're going to say that the business today is worth $500K and you're going to get, you know, call it 15%. Anything above that goes to you.

Okay.

And then it's also key for them too, because you're like, hey, for us to get above a $500,000, you know, EV for this, this thing, then we need to have profit for the location at, at, at $200K or whatever.

Yeah, right.

And it's like, hey, but if you get profit per year to $500K, then we're probably looking at something like $4 million. So you're going to get 15% of $4 million, have another $600K check, right, on the day of exit. That way.

Got it.

And I would just draw the same quadrant, which is like, yeah, there's 4 elements. And so I want to make you an owner. And this is how we're going to do it.

Got it.

The benefit to them is that when you do this, there's no tax implication.

Got it.

So because it's like if you were to issue them shares, they got to pay. Yeah, they got to pay taxes on it.

Right.

The other benefit is, and this is just being real, is that let's say in 5 years you don't want to sell, you change your mind, or they decide they want to move with their family.

Right.

Your equity doesn't walk with them. It comes back to the pool and you can give it to the next person.

Got it.

So it's basically this is fundamentally like phantom equity, right? And I think that's totally fine if you want to do that. The question is whether or not that actually changes their behavior.

Yeah. Yeah.

And so that's kind of like—

I call that it doesn't really.

I tend to agree. Yeah. For this particular role. But I do think the profit share is a much faster feedback loop. And I think that works.

Because there's months where they hit like the 20— if they're 20% and they could be taking on like $12,000, $15,000 profit next month. But then that kills our EBITDA for the next month, if that makes sense. Because it's coming out of payroll versus distribution.

Yeah.

I don't know if that makes sense.

No, I understand. It's basically—

maybe it's too small thinking.

No, it's— I mean, there's— the thing is, is that when you sell, there's add-backs, right?

Okay.

And so like the person who's buying it is going to do their own math on what they think.

Got it.

The actual— so like you're even— they're going to just— they're literally going to throw out your financials. They're going to do their own financials and then decide. That makes sense. Then that means that the other 4 locations probably have really low revenue.

So Auburn and Federal Way for sure. Okay.

What's revenue of those 2?

Revenue is roughly $40,000. A month. Okay.

So like $500K-ish?

Yeah, $500K.

Okay. That's the issue.

Yeah. Which is like our break-even number, right? Then Capitol Hill and Bellevue are higher than that. So they're middle.

Are they? How geographically concentrated are these?

They are all within 30 miles.

So all of them are one city?

Yeah. So, well, interesting. In the same area. But Auburn, Federal Way, and Kent are awesome because they're like within 5 miles and it's so easy to rotate staff after, etc.

So do you say Kent, Federal Way, and what's the other one?

Auburn, or like 5, 10 miles.

Auburn.

Interesting. Yeah, but those are two new ones, right? So like Auburn and Federal Way, kind of hard to judge. And if you looked at our EBITDA now, like if you did 6 months trailing versus 12, it'd probably be a lot higher ratio than that because they were kind of eating themselves in the beginning when I first opened.

You had to put some cash into it.

Yeah, exactly. Yeah.

Got it. Got it. Got it. Okay. So starting with the lead magnet, I think that offering like $19, $29, somewhere in there, first consult or free X-ray or something to that extent would probably go way better. And I do like, especially for your, your type of business, to do a low ticket and say something like this. It'd be like $29 X-ray, you know, plus, you know, assessment, blah, blah, blah. And the reason I like this is because you get the credit card on the phone. And even though it's an insurance thing, it's like, yeah, no worries. We just put a card down just for, for shop rate. Obviously we have a doctor who's going to be there, which is to make sure that you're going to shop. Right, right. And the thing is, is that if we bill them the $29, then the likelihood they shop is super high. And this is literally just to take shop rates to like basically 100%. Yeah. Hey guys, real quick, this podcast only grows from word of mouth. Quite literally. There's no other way to grow podcasts than word of mouth. If there's some element of this that you think somebody else should hear, would be relevant to them, it would mean the world to me if you shared this via text, via Instagram, via DM, via whatever way you like to share stuff with people you love. Thank you. So then, and this is over the phone, so we do this now when they walk in the door. Okay, so this is going to be a little bit of a departure.

Okay. Yeah.

So they walk in the door and when you, um, and I think the reason that you probably sold better, obviously you're better at sales than probably your, your docs are, right? But if you think about how sales works. So sales, you want to sell at the point of greatest pain, not the point of greatest satisfaction. And so the easiest analogy I have is like, okay, someone's starving, they come to my restaurant, I give them a steak and they're like, oh my God, that steak was amazing. And I'm like, hey, do you want another steak? And they're like, no, no, I'm good. But that steak was amazing though. I'm like, yeah, but do you want another steak? And they're like, no. And so it's kind of the same thing here where people are literally coming in pain, right? And ideally what I would want to do is we take the assessment Instead of doing the treatment, then I want to sell the package.

Got it.

Then if you want, if they have time, they can do it, or they can come back tomorrow, get their first treatment.

Got it.

So it's the same timescale. We just move the order around.

Yeah, that makes sense.

Because like, I mean, I've been this patient.

Yeah.

So like I go to the chiropractor, they do something, I'm in pain, they adjust my back, and then they're like, hey, come back for this. But I was like, oh no, I'm good. Like, you fixed it. I'm great.

Yeah, totally.

Right. And then they're like, but it's not a long-term solution. And I'm like, good enough for me, you know, like, and I'm out. For sure. And so that might be an immediate like 15, you know, 10 to 15% boost in sales. So like that's number one.

Okay.

But the thing is, is that I think that your close rates are going to go up. So one is like you're losing some on the drop-off, right? But I think close rates will go up and like when you're in pain, your desire for a more per— like all the desire is there in that moment and we're missing it, right? And so I always had this rule, at least like with fitness, is like when someone walks in the door, First thing I want them to do is expand the gap of where they are and where they want to be. So I have everybody hop on the scale and the amount of people like, oh, I don't want to hop on this. Like, I know. I'm like, get on the scale. We got to know where it's just a number. We got to know where we're at.

That makes sense.

And so it's the same idea with this. Got it. Lead magnet in terms of offer. I do think this would be good. This will increase show up rates overall. Getting somebody to get a $29 credit card purchase over the phone is like not hard, right? They do that, that secures their spot. Then when they come in, we do same day sale. What has been the issue with the docs making this sale? Like you said, they struggled with it. So there's two elements. You said there's like some insurance stuff there. So what was the issue here?

Yeah, so the issue is a patient comes in and then we have to verify their benefits. So there's like 20 different insurances and every patient has a different coverage or whatever, right? Yeah. So then we got to— we have to— we have to make our treatment plan, then take out whatever the insurance covers, and then they pay their copay or coinsurance. So just doing that process. Yeah. I think when they're on the floor seeing patients and then having to switch gears and do the math of like what this, you know, here's my recommendations, here's, you know, all that. I think that part kind of stresses them out.

How much of it is templated?

A lot. Most of it's like as far as the— so we have a—

we know that someone has Blue Cross Blue Shield, so whatever.

Yeah, yeah. It's all Excel spreadsheet. We can punch in numbers. We have a financial calculator for that.

So question. So someone calls. So basically there's two spots that we can put this, this process. So either we can do it on the phone Right. With the disco.

Yeah.

Or we can do it the moment they walk in the door. So it would work like this. So someone walks in and say, hey, do you have your ID on you? I just want to confirm your appointment. Yes, I'm Sarah. Cool. Great. Do you have your insurance card on you?

Yeah.

And so you ask that. That way we can get the templates already, like, ready to go.

Right.

So that then the doc goes and then he leaves them in there and he says, cool, let me get the X-rays. And then he comes in with the X-rays and with the template for their specific insurance.

Totally.

And then you can just match them and just do the sale. Yeah.

So the issue is like some of those some of those— so I centralize where they verify those benefits, right? Some of them could take like 30 minutes to an hour to get.

Okay.

So if that's, that's the—

okay. So then we have to do it over the phone.

Yeah, I agree. Okay.

Yeah. So if the $29 thing gets in the way, then we can still just do the— it's like you could either do a free offer, like free X-ray, free assessment, whatever. Just if that's an issue. I mean, personal preference, get the credit card and the insurance card.

Yeah.

Over the phone. If it seems like a training issue, then I would prioritize the insurance card. Yep. But then that way it's like you already have everything there preloaded. And so then they come out after the X-rays, get it printed out from the scheduler at the front desk.

Right.

And I mean, shoot, the morning of, I probably just add the SOP, print all the, print all the packets out for everyone, and then the doc gets them in the clipboard when they walk in the door.

Perfect. Yeah.

I mean, do you think that would work?

I think so. Okay. And then if they ask like, hey, why do you need my insurance? I thought it was $29. Then we'll say like, hey, just in case the doctor thinks he can help you. We just want to know all your insurance.

Yeah, I'll give you a different one. This is just how we always do it.

Okay. It works.

It works only every time. It's just like, oh, this is how we compute our patient profiles.

Okay, perfect.

Like, it's better to appeal to policy.

Totally. Yeah. Yeah. Makes sense.

So they'll get this. If this for whatever reason issue, you'll prioritize the insurance. They'll come in. They're going to have the printed out stack of all the insurance. The doc gets this on a clipboard.

Yep.

Right. In order of the patients that he sees that day.

Perfect.

He's like, okay, Mrs. Johnson, I've got your X-rays here, I've got your insurance here. Okay, this is what we're going to do for you. And then this prescriptive close makes sense. Okay. So right now, are there some locations that are having like way higher close rates than others?

Or like, what's the highest close rate? Probably I would say Capitol Hill. And what's the difference though? The doctor has a lot of certainty.

No, no, no. Percentage difference.

Oh, so let's say Auburn is— let's say they're averaging about 55, 60%.

Okay.

And then Capitol Hill might be like 80%.

Okay. Not— I mean, they're both okay.

Yeah, they're terrible. Yeah, they're not terrible. But if you look at— because a lot of these people have insurance, so their entry level financial is not like super high on some of them. So the ones that are those $10,000 cases have zero out of pocket. So I mean, you're going to have 100%. So kind of—

so this is how I would— so I would imagine that the packages themselves are going to be similar. It's just how much is being covered is going to be the difference. Yeah, is that about right?

Yeah. And then also the fact that I think if a clinic sees a lot of those 100% coverage ones, then they kind of skip— then they start— they don't work on their sales skills for the ones that are right. It's like, oh, these are crappy leads or shitty leads or whatever. Yeah, but you just— because you have to work a little bit for them, right? So I think just creating that training, that's, that's on me to train them and then role play more.

I'll give you something that will help you a lot with brick and mortar. So I've done a lot of brick and mortar sales processes in my life And as much as possible, I'd like them to be like clicks and checkboxes. But so it's like, like when we sell supplements, for example, it's like you literally just turn a laptop around and then you just like punch through it and you literally just say the words. And then at the point that you ask for the thing, you ask for the thing, like you really can machine it that way.

Yeah.

And that will eliminate so much of the variability between people. And so I would look at what the top 80% guy is doing consistently, break that into the basically the deck Okay. So that they have a visual aid to go through it and then it just feels like, oh, this is, this is the next step. I do this, this is what you need, this is what we cover. He circles the thing on their, on their thing, turns it to them, and then they make sense. They rock and roll. And then they just book out their next appointments, I'm assuming.

So they're kind of looking at a teleprompter almost like, okay, got it.

But they can show it to them.

Okay.

So there's two ways to do it.

Yeah.

One is you have the laptop and you turn it towards the customer and then you basically read the words on the slides. That is like the perfect sales pitch, but with visual aids and whatnot.

Got it.

The second way of doing it is you have that clipboard, but they don't know what's on the clipboard.

Right.

And so the clipboard just has the script.

Got it.

And so it's like, cool, I'm just going to ask you a couple of questions. And so you basically go through the sales process and you just look like you're checking off the boxes as you're going through a script. But then they always say the script and then the doc can visually show this, which they then staple to the patient contract. That way, you know, they followed the process and then it just keeps it consistent every time. So either of those work. I've done them both.

Okay. Okay.

So from— so that was— so number one, we had—

would you have the doctor do the sales process or do you think— do you think it's okay to train them how to be good at sales? Do you think of having like a patient coordinator do the sales? You know, because like, yeah, because there's— they always have some reservations. Yeah. You know how doctors are compared to like a regular—

I do know how doctors are. Okay. So you're saying this person or this person?

This person.

Oh, this person doing it.

Like if you have a doc that doesn't have a lot of confront or conviction, yeah, I mean, a lot of times the manager will. So I don't know if it's better or—

honestly, I mean, I like it better here.

Okay.

For some of the reasons that you already outlined, right? Because you already have this person. And if the thing is, is this will— you'll start hiring differently if that's their role because they'll really just become salesmen.

Exactly.

Yeah. Which I'm not against, to be clear. It may impact the compensation of the docs though. Yeah, because like this guy, this guy or gal probably needs to make somewhere in the neighborhood of like— they should be able, if they're doing a good job, to hit $100 grand a year.

If you want, like, you know, $100 grand. Yeah, yeah, for sure.

Like if they're, if they're hitting, you know, if they're hitting out of the park, they're doing $600,000 profit for the location, they can make an extra $50 grand or $40 grand with commissions.

Yeah, that would be the most important position in the office at that point.

Yeah, 100%. Because I mean, which I kind of like, because then you could swap docs out if you need to.

Totally.

For being weird or whatever it is, right? Okay, so I do like this. So I would probably not roll that out immediately to all of them. I would just like go to Auburn.

Yeah.

And be like, okay, this is the person that I want to— we'll try it out. And if the close rate's higher and then also you can get your efficiency up because totally. Yeah, you're the doc, only does half the work. The other person does the other half.

Right.

Okay. So the next one is I think ad spend needs to go up. So what? Yeah, because you're not spending very much.

Yeah, I know. You know, it wasn't until I had to do this process, I was like, shit, we can— I mean, because the return is so high on some of those things. And if I— I mean, I would spend like $1 million a month on Google AdWords if I could.

Yeah.

So how do we— like, I guess that would be one thing to increase.

Well, the first thing I would just literally tell them, like, I need you to double the ad spend and I need you to find more keywords. Okay. So just find more for me.

Got it.

The other thing that might be worth looking into would be local SEO.

Okay.

Because SEO, especially for intent-based, so it's like obviously there's search, but it's not hard to win at SEO locally. Okay. Like nationally you want to win back pain and good luck, but like, yeah, you want to win Everett, you know, chiropractor Everett spine, Everett pelvic health, Everett low back, Everett lumbar, Everett— like, you mean there's so many sciatic, like all those. I think you could probably win on long-tail keywords.

And then one thing that helps us on that, I think, is we're pretty good about getting reviews. We have more reviews than everybody in our cities.

Oh, that's great.

And then I think that helps with the local SEO. But yeah, and I guess the big question is like with ad spend, a lot of these— so the agencies that we hire, like they work with many chiropractors, right? So most chiropractors don't do what we do, which is sell packages of $2,400. They do visit to visit, which is a nightmare. So I think that they base our ad spend— they're recommending our ad spend based on that. But my return on it is so much higher than the average guy. Oh yeah.

So then I outspend everybody.

Yeah, totally.

So you might have to talk in in marketer speak for them.

Okay.

And just give them our target CPA, like cost to acquire or CPO, and just say like, listen, I can, I can pay up to this. So like, make it rain, dude. As long as it's under this, I'm good.

Okay. And would you— when would you consider bringing that all in-house? Because I kind of— I hate dealing with these.

No, I get it. I get it. It probably wouldn't be my priority right now because like, if I look at this, I'm like, okay, we got 12 to 1, 24 to 1, 91. So I'm like, we're doing pretty well on this, right? And do you not have— do you have Google on the other 3 as well?

Yeah.

Okay. It's just not there.

I picked up a 1, like a high, middle, low.

Oh, so that's low. 9 to 1 is a low one.

Yeah, for sure.

Oh, that's great.

Yeah.

Jeez. Okay, cool. So I would say basically I'd stop it at 5 to 1.

Okay.

And say like, so basically double or triple whatever the CPA there currently is. Right. And sometimes what you'll find though is that if you can double or even triple how much you can spend to get a customer, you might be able to like 10x lead flow.

I see.

It's not like it's not, it's not, it's not proportional, right? Because you just all of a sudden you spend this many more people. Yeah. Okay. So this is specific to Facebook.

Okay.

Which I think could be the— like, honestly, this could be the differentiating factor in terms of how much— like, this could be something that just like in terms of leverage.

Yeah.

Could be a double or triple on Facebook, which then would get you closer to that 9 to 1 or 10 to 1, which I think it should be.

Right.

The ad copy thing we already talked about. Discovery process is this new guy where we're going to get insurance and the card on the phone. I like that. They're going to print it out the next morning or whatever, print same-day stack. The doc is going to just do the X-ray and the assessment, and then he gives the handoff with the clipboard that has for the patient. Sales manager then does the sale right then. And I think that we just book the treatment that next day. Okay. Just book them the next day.

Okay.

So I think if we do these things, then that's probably about 6 months of work.

Yeah. Yeah. And then would you recommend doing this? Like, should I, should I do this in this order? This is for locations. Also, should I start with one or like, because like, would you do Google Ads and the Facebook at the same time?

So I would do these one at a time. So Google Ads, when you probably increase across all of them because you're—

Yeah. Yeah. Because when I had one location, I mean, we did none of this stuff. I mean, all I did was guerrilla marketing. Yeah. And then— but you can't scale that. It's so hard to scale that.

So you can— it's just tougher. It's just basically becomes more operational. So like if you look at, you look at some of the, like the big like gym chains and whatnot, like they run their trainers the same way. They go, they do lead boxes, they go to Whole Foods, they stand outside, they get names. Like they just— that's just the culture. Yeah. And in a different way, the cool thing about the guerrilla marketing is that it always works.

Yeah, right.

It's just it, it always works no matter how technology changes, no matter where. And I think that's why those guys do that. I remember I used to, I used to laugh at them because I like could run Facebook ads and I was like, I was like, man, these guys are idiots. And then I realized that they had a $2 billion company and I was like, yeah, maybe, maybe, maybe I'm the idiot.

But it also helps with communication and sales because I mean, I learned all my sales skills through that because I got shut down so many, got kicked in the nuts so many times that you just have to keep getting back up and do it over again. Right.

So this is great. So you have 6, you start, what did you do before this?

Before the clinics? So I opened my first one in 2007.

So you're a chiro?

Yeah. So I practiced till 2012, one clinic. And then what'd you do in that clinic?

Top line, bottom line?

$3 million. And top line and bottom line is probably about $1.7 million. Yeah, great. So, but yeah, so then it was burning me out though. I was exhausted. So you're like, I'm going to burn other people out. Yeah. So then I started building houses. So then I started building houses and I was making good money off that for like 8 years, like luxury homes. But I still owned my main clinic and had an associate in there. It was doing okay. And then 2021, I thought that where 2020, I thought the market was going to tank.

Sure.

So then I thought, hey, what can I do with my clinic? There must be something I can do bigger than just one clinic, right? And then started talking to some of my friends that were learning about M&A. And yeah, like one of my really good friends founded Valley Village, another one, his dad found Cinnabon.

So then I started thinking like a little different in locations in terms of rolling things.

Yeah, they started, they started those. They're the original founders of those companies.

Super cool.

And then so it's giving their perspective on things and what I should do to grow. And they told me, hey, you should, you should open up if you can. Replicate it, open up multiple practices, and sell to private equity.

I like the lean— I like the lean model. Yeah.

Okay, for sure.

Well, dude, awesome, man.

Thank you so much. Appreciate that. That's awesome.

You're going to crush it.