When Nick Krause, DC, began to plan his new chiropractic practice, he thought he knew how tough it would be because he had previously worked as a funeral director. But he underestimated the work and time it would take, and he says he encountered far more difficulty than he would have imagined. Even after working in another field before chiropractic, the learning curve is huge, he says, because a startup practice requires wearing many hats at the same time. Now, almost three years later, Krause can relax a little and talk about his successful practice and offer some advice to others who are starting into practice.

Like many chiropractors, Krause came to the profession from another career. In his case, that career was mortuary science. After five years of undergraduate school and mortuary school, Nick was working as a funeral director when he began to take a hard look at whether this was the career he really wanted. Too many on-call nights, weekends, and holidays made him think that this was not the life he wanted with a young family. One day he was in his chiropractor’s office and he mentioned he was thinking of going to chiropractic school; the chiropractor urged him to think more about chiropractic as a profession. After many sleepless nights and conversations with his wife Kim, Nick decided to move to Davenport and attend Palmer College.

Krause prepared for startup by researching many locations, and ultimately decided upon Rochester, Minn. After graduation the Krauses (now with one young son, Collin) moved there to set up practice. Rochester, home of the prestigious medical institution The Mayo Clinic, with 25,000 employees (and no chiropractic coverage in its health benefits), might seem an unlikely spot for a new chiropractor. But the Krauses were looking for a smaller town (Rochester is home to about 85,000 people) that was close to both families. They don’t regret their decision, because they still believe Rochester is a great place to raise a family. Nick says, though, that he should have done some more research about taxes in Minnesota and the cost of living in Rochester.

In preparation for startup, Krause worked very hard on his business plan, but he had three major challenges getting started. The first was the high cost of rental space, which he found was twice as much as he anticipated, including CAM (common area maintenance), which increased his rental rate to over $20 a square foot. This meant he had less money to work with (and live on) while he was getting started. He didn’t find space for several weeks, and was getting a little concerned about finding something acceptable, when he finally located a great office with adequate space in a perfect growth location. It was a big surprise to find out that the cost was more than in some suburbs of Chicago and Minneapolis.

The second delay was a bank that was not easy to deal with and that sat on his business plan for six weeks. Finally, in desperation, he grabbed his loan documents and walked across the street to another bank, where he succeeded in getting an approval and funding in a few days. He financed with an SBA loan guarantee, but he refinanced a year later and he’s in the process of refinancing again to get a “straight” loan without the SBA guarantee. This process, he acknowledges, is at the mercy of banks and their policies and individual bankers.

The third problem he encountered was delays in build-out and getting blueprints approved by the city. These delays caused him to be two months behind schedule in opening. Of course, he still needed to feed his family and pay his bills, with no more student loans to cushion the financial situation. Krause’s wife teases him that their second son Dawsen was born in the middle of all this, and Nick had to leave the hospital to meet with electricians in order to stay on schedule. He says having an understanding spouse is critical to successful startup! Looking back, Nick says that everything was more work and commitment and nothing was easy. The most difficult part, he confesses, was wondering whether or not he would run out of money before the business was able to survive on its own.

To get his first patients, Krause tried a lot of the typical advertising efforts. He ran ”killer” ads, used radio and newspaper advertising, joined the chamber of commerce and did a ribbon-cutting, and took out a yellow pages ad. Nick says radio didn’t work and newspaper ads were not very effective, but the yellow pages ad continues to bring in prospective patients. He learned that building practice recognition, by talking with everyone from the contractor on the build-out to neighbors, was most effective, and today he relies mostly on internal marketing to support his patients in referring others to the practice and on yellow pages visibility for cross-connections.

As expected, the first year was the most difficult. Nick says he was at the clinic all the time and if he wasn’t at the clinic he was thinking about the clinic. He says, “You are learning things that you never heard of, trying to tweak paperwork that suits you and your style of practice, and just keeping the business going. At the beginning, patient care was the smallest part of practice because I didn’t have any to practice on!” Even though it was difficult, with countless sleepless nights, Nick says he never thought about giving up because he had his family relying on him. There wasn’t a point where he knew he would make it, but he says when his patient numbers began to stay at a consistent level, it really felt great.

Today he sees a solid number of patients a week and he has just welcomed another doctor into the practice. His patient base is about 60 percent insurance and 40 percent cash, and he works at getting people off insurance and onto cash payments. Having patients who work at the Mayo Clinic is nice, because they don’t have insurance and their care isn’t limited by what insurance will pay.

His biggest continuing problem is staffing. He has had five different employees, some of whom he had to fire and others who left. Each change meant that his wife had to come in and help out; there was no continuity of operations, which meant that there was no office “system.” Finally he has a great office assistant who is maintaining the systems to keep everything running smoothly. In addition to finding a good staff person, having a management group, Krause maintains, is worth the cost, because they can help with phone calls and support, and they can give advice on scripts and ideas for internal marketing.

When asked what advice he would give to chiropractors who are just starting out, Krause says, “Do your homework. Find out everything you can about the city and the area.” He also suggests taking an active part in each aspect of the startup process to be sure it gets done in a timely manner. You can run through a lot of money waiting for other people to do things, he says, and sometimes you just need to charge in and get them done yourself.

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