Chiropractic + Naturopathic Doctor

Business Talk: Coin return

Anthony Lombardi   

Features Business Finance

How to create money by reducing expenses

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Practitioners who run multidisciplinary practices will find they are able to create new revenue by simply reducing expenses versus putting efforts into attracting and seeing new patients. By re-evaluating every spending transaction, I went through and tracked every dollar spent in 2013 and 2014 to determine what was needed, what was optional, what was unnecessary, and what could likely be discounted by the supplier.

Business classes should exclusively allot time on this topic. In many ways, focusing on expenses is more important than learning how to generate income – because it’s easy to do. An expense is anything that is essential or necessary to help you run your business and generate revenue.

Essential expenses are things like rent, the electricity bill, phone bill and licensing fees. Necessary expenses can vary from one office to another, but could include certain advertising costs, costs of specific supplies (i.e. acupuncture needles), and costs associated with therapists and support staff.


An asset is simply something that generates income, while a liability is anything that does not generate income. For example, you are an asset because you see patients and you directly generate income. Your car, however, is a liability because it doesn’t generate income. If you own your office space, it’s an asset when you rent the rooms out to other therapists. Along the same lines, your primary residence is not an asset but a liability, because although it may have cash value, it does not generate income (unless, again, you have tenants living with you).

Guaranteed expenses
Depending on whether you own your clinic, rent the building or simply rent a room, you will have a different set of guaranteed expenses. This means before you ever see a patient you will be committed to certain yearly expenses. From a purely operational expense perspective, renting an entire office space is the most expensive option and renting a single room is the least expensive option – but it limits how much income you can generate because space is limited. Owning your own office space is less expensive than renting, and maximizes your revenue producing potential.

I have put together a comparison using actual values and average values of certain expenses to give us an idea of the cost of doing business, before we even begin doing business.

If you rent an office space, the annual preset cost is $50,400, based on the following commitments:

  • Office rent: $3,500/month for 1,000 sq/ft
  • License and association fees, malpractice insurance: $5,400
  • Fire, theft, slip/fall insurance: $3,000

If you own the clinic and land, the annual preset cost is $23,500, based on the following commitments:

  • License and association fees, malpractice insurance: $5,400
  • Property taxes: $8,600
  • Snow removal: $4,500
  • Lawn maintenance: $2,000
  • Fire, theft, slip/fall insurance: $3,000

If you rent one or two rooms from a clinic, the annual present cost is $13,800, based on the following commitments:

  • License and association fees, malpractice insurance: $5,400
  • Room rental: $700/month

How to find money
Darryl Meyers, who works at a Walmart in Burlington, N.C., noticed the lights were on in the pop machines inside the break rooms. He suggested turning the lights off on the machine to save electricity. Walmart took his suggestion and has since saved more than $1 million every year. Robert Kiyosaki, author of the book, Rich Dad, Poor Dad, thinks of dollars as employees. The more employees (dollars) you have in your possession, the more impact you can have in generating more income. If you can find ways to retain more dollars, then you can preserve the quality of your product while building your financial base. By concentrating on my business expenses I have been able to “find the pop machine” in my office and saved over $4,000 per month by simply re-tooling the following expenses.

Percentage set up
Some therapists and chiropractic associates may work as employees and earn an hourly wage. This can become costly because you have to pay the employee even when they are not seeing patients. Instead, hire them purely as an independent contractor working on percentage. This means they only get paid when they are working on patients, and this means the patient payments are going towards paying the therapist/associate fees – not you.

Reduce salaries
Once you create quality operation systems in the clinic for booking, collecting payment and billing, you will realize that your support staff won’t need to have a lot of experience which means you can pay them less. Remember, if you lay someone off make sure you use an employment lawyer so you can provide the proper amount of severance benefits without
getting sued.

In my previous article, I preach the importance of becoming incorporated so you can pay less tax and retain more dollars. Regardless of what some accountants say, being incorporated is much better than being a sole proprietor. This is because when you are incorporated, you are using pretax dollars to spend on expenses; while when you are a sole proprietor you are using post-tax dollars to pay for business expenses and then have to wait for a tax refund once per year. Being incorporated also gives you the option of only paying yourself the amount you need for your personal expenses so you can keep as many dollars in your possession inside your business bank account.

Merchant fees
The point of sale (POS) machine for debit and credit card services can be a large business expense. Simply ask your provider for what’s called a “rate review” every two or three years, and they will give you an updated competitive rate to prevent you from renegotiating your contract with another company. I did this and they reduced my fees by 17 per cent, which saves me an average of $122 per month. In addition – and this is important – you can save an additional $50 per month if you become what’s called PCI compliant. Being PCI compliant means you are certified with their fraud prevention governing body to make sure your internet connection and IP address are uncompromised during transactions. Getting certified took about 10 minutes over the phone and my POS merchant company pays the fee for this service. As a result, I now pay $50 less per month and get my PCI fees reimbursed for what I paid in the last 90 days.

Diesel car
In 2013 I bought a SUV that runs on gasoline. In 2015, the car was replaced with the identical vehicle, only that it ran on diesel fuel. The difference in fuel cost was astounding. Diesel fuel is cheaper and gets over 30 per cent more mileage compared to traditional gasoline vehicles. Switching to a diesel vehicle reduced my fuel costs by 55 per cent.

Acupuncture needles
As you know I practice acupuncture and we go through about 50,000 needles per year. By sourcing several different suppliers I went from spending $3,500 per year to spending $1,400 for the same quality and amount of needles.

Credit cards
Always go over your credit card expenses and make it a point to try and reduce your bill by 10 per cent. Making sacrifices like eating out less, and only buying what the business needs will reduce what you spend. After all, what gets measured gets improved.

Please email me with any questions about the sources I use and I will happily pass on the information and savings to you – for no cost at all. My email is 

Dr. Anthony Lombardi, DC, is consultant to athletes in the NFL, CFL and NHL, and founder of the Hamilton Back Clinic in Hamilton, Ont. He teaches his fundamental EXSTORE Assessment System and conducts practice-building workshops to health professionals. Visit for information.

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