Lecture Notes: Business Strategies for Chiropractic Chain Expansion

Introduction

• Speakers: Raymond (Chiropractor, Founder of ChiroFirst of Washington) and Alex (Investor).
• Objective: Alex aims to help Raymond grow his chiropractic chain to the next level.

Current Business Overview

• Business: ChiroFirst of Washington
• Locations: 6 brick-and-mortar locations.
• Revenue: $5.2 million in trailing 12 months.
• Profit: $1.2 million with a net margin of 23%.
• Expansion Strategy: Initially through acquisitions, considering organic growth in future.

Business Goals

• Three-Year Goal: Achieve $5 million EBITDA.
• Long-Term Vision: Build a business that runs independently and potentially sell to institutional buyers.

Demographics and Services

• Target Demographic: Men and women aged 35-65 with conditions like pain, discomfort, or reduced mobility.
• Service Model: 75% insurance-based, custom treatment plans over 60-90 days including chiropractic, rehab, spinal decompression.

Revenue Model

• Consultation: Free initial consultation.
• Packages: $2,400 - $3,600 over 60-90 days; larger cases (e.g., car accidents) can be worth up to $10,000.
• Revenue Model: Primarily recurring with high ticket packages and insurance-based larger cases.

Marketing and Lead Generation

• Advertising Channels: Facebook ads ($1,000/location), Google ads ($500 - $1,000/month/location).
• Lead Conversion Rates: 35 leads/month, 28 shows (~80% show rate), 71% close rate.

Challenges and Constraints

1. Lead Flow: Inconsistent, more difficult to manage across multiple locations.
2. Sales Infrastructure: Complexity due to insurance-based plans.
3. Operational Scale: Maintaining quality and standards across all locations.

Financial Metrics

• CAC (Customer Acquisition Cost): $700
• LTV (Lifetime Value): $3,400
• Marketing Spend: $1,500 - $2,000/location.
• Annual Ad Spend: $110,000

Analysis and Recommendations

• Advertising Efficiency: High ROAS (Return on Ad Spend) with Google Ads.
• Sales Process Optimization: Increase ad spend, improve ad copy, better front-end offers.
• Operational Improvements: Streamline insurance verification, improve sales training.

Strategic Changes for Growth

1. Increase Ad Spend: Particularly on high ROAS channels like Google Ads.
2. Ad Copy & Offers: Enhance clarity and attractiveness of offers.
3. Sales Process: Sell at the point of greatest pain, not post-treatment.
4. Lead Management: Implement a system for consistent, high show rates.
5. Insurance Process: Verify insurance quickly, ideally before the appointment.

Long-Term Strategy

• Local SEO: Invest in local search engine optimization for sustainable lead generation.
• Sales Training: Develop consistent sales scripts and processes to minimize variability.

Conclusion

• Action Plan: A detailed plan to double revenue and improve operational efficiency.
• Outcome: Potential to achieve the $5 million EBITDA goal with strategic implementation.

These notes summarize the key points from the lecture and provide a framework for Raymond to grow his chiropractic chain efficiently while addressing current challenges.