Podcast Summary: Helping A Chiro Scale Past 6 Locations | Ep 837

The Curl Boy's Podcast
Host: The Curl Boy
Guest: Raymond Kuner, Owner of Chiro First of Washington
Release Date: February 14, 2025

1. Introduction

In Episode 837 of The Curl Boy's Podcast, host Alex engages in an in-depth conversation with Raymond Kuner, the owner of Chiro First of Washington. Raymond oversees six chiropractic clinics in the greater Seattle area, generating approximately $5.2 million in annual revenue with an EBITDA of around $1.2 million and a net profit margin of 23%. The episode delves into Raymond's strategies for scaling his business beyond six locations, exploring both successes and challenges encountered along the way.

2. Business Overview

Raymond Kuner introduces his chiropractic chain, Chiro First of Washington, highlighting its current footprint and financial performance.

• Ownership & Growth Strategy:
  Raymond has expanded his clinics primarily through acquisitions, having purchased all six locations to date.
  “So far I've bought all of them. But I think moving forward we're going to change our strategy a little bit.”
  (00:32-00:36)

• Demographic & Services:
  The primary demographic consists of men and women aged 35 to 65 experiencing pain, discomfort, or mobility issues. Chiro First distinguishes itself by offering niche services like spinal decompression for disc-related injuries.
  “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.”
  (01:00-01:21)

• Revenue Streams:
  The business operates on a recurring revenue model, with treatment packages ranging from $2,400 to $3,600 over 60 to 90 days. Additionally, approximately 14% of patients engage in higher-value cases, such as car accidents or work injuries, potentially worth up to $10,000.
  “We're primarily a recurring revenue model and roughly one out of every seven of our patients, they come in for a larger case value.”
  (01:25-01:50)

3. Current Challenges

Raymond outlines several key constraints hindering the scaling process:

• Lead Flow Consistency:
  As the number of locations grows, maintaining a steady and predictable lead flow has become increasingly difficult.
  “When I had one location, it was really easy to predict that and to change the outcome pretty quickly. But as we've scaled, I'm having a tougher and tougher time.”
  (02:44-02:52)

• Sales Infrastructure:
  With 75% of revenue insurance-based, managing diverse insurance plans and verifying coverage is time-consuming and complicates the sales process.
  “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.”
  (02:19-02:36)

• Scaling Operations:
  Decentralizing marketing efforts and finding qualified chiropractic professionals poses significant challenges, especially when expanding into new locations.
  “Decentralizing the marketing has been a challenge for us. Limited employee pool. Right. So right now we're not expanding.”
  (03:48-04:02)

• Maintaining Standards Across Locations:
  Ensuring consistent operational standards across all six clinics is increasingly difficult as the business grows.
  “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.”
  (04:06-04:14)

4. Marketing Strategies

Raymond discusses the current marketing avenues and their effectiveness:

• Advertising Channels:
  Chiro First utilizes Facebook Ads and Google Ads, investing approximately $1,000 per location on Facebook and $500 to $1,000 on Google monthly.
  “So the two means of advertising are. Number one is Facebook ads. So we spend about a thousand bucks per location on that. The second one is Google Ads.”
  (01:50-02:06)

• Performance Metrics:
  The clinics receive about 35 leads monthly per location, with an 80% show rate and a 71% closing rate, resulting in approximately 20 sales per month.
  “On average? We're getting about 35 leads per month. And out of the 35, we have 28 that show... And our closing rate is about 71%. So total sales probably roughly around 20.”
  (02:10-02:24)

• Challenges with Ad Consistency:
  Although some locations perform exceptionally well (e.g., Kent and Everett), others lag, indicating inconsistency in lead quality and conversion rates. Raymond attributes higher performance to demographic factors, such as a greater proportion of high-value cases in certain areas.
  “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.”
  (05:53-06:17)

• Recommendations for Improvement:
  Alex suggests optimizing Facebook ad copy for clarity and engagement, emphasizing immediate pain points, and introducing enticing lead magnets (e.g., discounted initial treatments) to boost show rates and close rates.
  “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 Everett like residents with back pain.”
  (13:11-15:12)

5. Sales Process

The sales funnel employed by Chiro First of Washington involves several stages designed to maximize conversion rates:

• Lead Generation to Appointment:

  • Initial Contact: Leads from Google Ads typically involve a direct call or online scheduling via a centralized call center.
  • Show Rate: An impressive 80% of leads show up to their scheduled appointments.
    “We have a show rate of about 80%.”
    (02:17-02:19)

• Appointment Flow:

  • Day 1: Consultation, X-rays, and a light treatment. Patients are informed they will return the next day to discuss results and finalize a customized treatment plan.
  • Day 2: Presentation of the financial plan and closure of the sale.
    “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.”
    (09:00-10:05)

• Reminder System:
  To ensure high show rates, patients receive three text reminders and follow-up phone calls if necessary.
  “We do three text messages and then we do a phone call the night before to confirm and then we'll do another one like you know, two hours before their appointment.”
  (09:35-09:53)

• Challenges in the Sales Process:
  The integration of insurance verification complicates the sales pitch, as doctors must balance clinical assessments with financial consultations, often leading to stress and variability in closure rates.
  “They have to verify if they have coverage and then we'll charge them a copay. And it's different for every single person."
  (11:18-11:45)

• Proposed Enhancements:
  Streamlining the insurance verification process either on the phone or upon arrival can reduce friction, allowing for a more consistent and efficient sales process.
  “So, we have to verify if they have coverage and then we'll charge them a copay.... So we can get on top of that.”
  (26:07-26:16)

6. Team Structure and Operations

Raymond outlines the organizational structure across his clinics:

• Staff Composition:
  Each location typically comprises a doctor (the primary operator), a team lead (office manager equivalent), a scheduler, and a rehab technician, maintaining a lean team of four employees per site.
  “And then there's just usually a scheduler and a rehab tech. That's it. So I'm trying to, I try to keep it to four employees per location.”
  (18:07-18:21)

• Compensation Model:
  Doctors receive a base salary between $80,000 and $150,000 annually, complemented by a profit-sharing arrangement ranging from 10% to 20% of net profits.
  “They, they make between base of 80,000 a year, but they probably like our top ones making like over 150. And then... they range between 10 and 20 net profit.”
  (18:38-18:52)

• Equity Considerations:
  Discussions with Alex reveal the potential benefits and drawbacks of offering equity or profit-sharing as incentives, weighing factors like tax implications and the desire for employee alignment with business growth.
  “I offer. They range between 10 and 20 net profit. That's good.”
  (18:48-18:52)

• Operational Challenges:
  Maintaining consistent operational standards across all locations becomes increasingly complex as the number of clinics expands, particularly in areas like patient verification and sales consistency.
  “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.”
  (04:06-04:14)

7. Strategic Recommendations

Throughout the episode, Alex provides actionable insights to help Raymond overcome his scaling challenges:

• Enhancing Marketing Efforts:

  • Facebook Ads Optimization: Refine ad copy to be more engaging and targeted, focusing on immediate pain points and clear calls-to-action.
  • Increase Ad Spend: Given the high return on Google Ads, Raymond is encouraged to significantly boost his budget in this channel.
  • Local SEO Improvements: Target long-tail keywords specific to each clinic's location to improve organic search visibility.
    “I think just creating that training that's on me to train them and role play more.”
    (29:42-30:00)

• Sales Process Refinement:

  • Scripting and Standardization: Implement standardized sales scripts using visual aids or teleprompter-style scripts to ensure consistency across all locations.
  • Role Assignment: Consider delegating sales responsibilities to dedicated patient coordinators rather than relying solely on doctors, allowing for more focused and efficient sales pitches.
    “The clipboard just has the script. And so it's like, cool. I'm just gonna ask you a couple questions.”
    (31:07-31:08)

• Operational Efficiency:

  • Insurance Verification Streamlining: Incorporate insurance verification either during the initial call or upon patient arrival to reduce the cognitive load on doctors during consultations.
  • Profit Share vs. Equity: Evaluate the benefits of offering profit-sharing arrangements over equity to motivate staff without complicating ownership structures.
    “So that way we already have everything. They're preloaded. And so then they come out after the X rays, get it printed out from the scheduler at the front desk.”
    (27:05-28:00)

• Scaling Strategy Implementation:

  • Pilot Programs: Test proposed changes in select locations (e.g., Auburn) before a broader rollout to monitor effectiveness and make necessary adjustments.
  • Focus on High-Performing Areas: Leverage the success of top-performing clinics to replicate best practices across other locations.
    “I would do these one at a time. So Google Ads, when you probably increase across all of them because you're already.”
    (36:44-36:52)

8. Conclusion and Future Outlook

Raymond recounts his entrepreneurial journey, transitioning from solo chiropractic practice to multiple clinic ownership, and briefly touches on his foray into real estate. Inspired by peers who successfully scaled their chiropractic businesses, Raymond is now focused on refining his operations and marketing strategies to achieve his three-year goal of reaching $5 million EBITDA. The collaborative dialogue with Alex underscores the importance of standardized processes, strategic marketing investments, and efficient sales mechanisms in scaling a service-based business effectively.

Key Takeaways:

• Consistency is Crucial: Standardizing sales and operational processes across all locations ensures uniform performance and customer experience.
• Strategic Marketing Investments: Prioritizing high-ROI channels like Google Ads and optimizing Facebook ad strategies can significantly enhance lead flow and conversions.
• Operational Streamlining: Simplifying complex processes, such as insurance verification, reduces bottlenecks and empowers staff to perform more efficiently.
• Team Empowerment: Providing clear scripts and training for sales roles can mitigate variability and enhance conversion rates across all clinics.

Notable Quotes:

• Raymond Kuner:
  “So 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.”
  (00:36-00:48)

• Alex:
  “It's the same time scale. We just move the order.”
  (24:40-24:44)

• Raymond Kuner:
  “So our two lower, lowest performing are Auburn and Federal Way.”
  (12:03-12:06)

• Alex:
  “The thing is, is that your close rates are going to go up.”
  (25:10-25:15)

9. Additional Resources

At the end of the episode, Alex offers listeners a free Scaling Roadmap designed to help businesses scale across various functions such as marketing, sales, product, and more. Interested individuals can access the personalized roadmap by visiting acquisition.com roadmap.

This episode provides valuable insights into the complexities of scaling a multi-location chiropractic business, highlighting the interplay between marketing effectiveness, sales process optimization, and operational consistency. Raymond's experience, coupled with Alex's strategic recommendations, offers a comprehensive roadmap for similar businesses aiming to expand beyond their current capacity.