May 2023
Adam Hoeksema
The IRS publishes tax return data each year on the roughly 28,000,000 sole proprietorships in the U.S. We analyzed the 27,451 tax returns that were filed in the chiropractors industry to pull out some key statistics and insights to help our customers ensure that they are creating realistic financial projections for their chiropractors.
We hope that this data will be helpful for you as a “reality check” for your financial projections and business planning process. We hope you create a forecast for your unique situation and plan, and then use this data to make sure your projections seem reasonable based on industry averages.
Here is what we will cover in this article:
Learn How to Use this Financial Data
If you are creating projections for your startup business, or you just want to see how your existing business stacks up to industry averages, you can take your income statement and compare key ratios and percentages for your business compared to this industry average data.
How many chiropractic businesses in the US are sole proprietorships
There are approximately 27,000 chiropractors businesses in the US organized as sole proprietorships. We specifically analyzed 27,451 companies based on the 2019 IRS tax return data.
Average annual revenue for chiropractors
The average annual revenue for all sole proprietorship chiropractors businesses in the U.S. was $139,872.
Remember that this number will include chiropractors that are practicing part time as well as full time chiropractors and even firms with multiple chiropractors working at the same business.
This underscores the importance of actually creating your own chiropractor projections based on your planned facility capacity.
Average annual expenses for a chiropractors
The average annual expenses for all sole proprietorship chiropractors businesses in the U.S. was $93,294.
This likely includes licenses, rent paid, and any kind of advertising, but varies depending on the size and location, so again let’s not focus too much on the specific dollar amounts here, what we can gain from this tax return data is an understanding of expenses and profits as a percentage of revenue rather than a specific dollar amount.
Average net profit margin for a chiropractor business
The average net profit margin for a chiropractors business was 33%.
How much can I make by owning a chiropractic business?
In order to calculate the earnings potential of a chiropractors you can take the following assumptions:
- Average hourly rate per appointment
- Appointments per day
- Days per week
These assumptions will allow you to come up with a revenue forecast for your assisted living facility. From there you can apply the 33% profit margin.
Top 8 expenses for an chiropractors business
Based on the tax returns of 27,451 sole proprietors operating in the chiropractors industry, the following were the 8 largest business expenses as a percentage of revenue.
Average salary expense for a chiropractors business
The average chiropractors business spent 13% of annual revenue on salaries and wages.
This makes sense, given the need to deliver the services to the clients to drive revenue.
Average rent expense for a chiropractor
The average sole proprietor chiropractors business spent roughly 9% of annual revenue on rent.
This also makes sense since there is a need for a space to complete the service.
Average other business expense for a chiropractor
The average sole proprietor chiropractors company spent roughly 8% of annual revenue on other business expenses.
Average material cost of goods sold for a chiropractors
The average chiropractors spent roughly 5% of annual revenue on material costs of goods sold.
Important Details about the Data
I want to point out a few key items about the data:
- You can download this data for free from the IRS website.
- The data includes 27,451 chiropractor sole proprietorships in the U.S. in 2019.
- This data will include businesses that operate full time, and businesses that only operate on a part time basis.
- Because of this, you should take the raw numbers for revenue, expenses and profit with a grain of salt, but the percentages can still be quite valuable when trying to forecast expenses for your business.
- This data includes businesses from all across the country, keep in mind that revenue and expenses can vary greatly based on your specific geographic location.
- We used 2019 data because we felt it was most likely to be representative of a “normal” environment for the industry. COVID-19 caused disruption to almost every business in 2020 and 2021, so we wanted to utilize “normalized” data.
If you have any questions about the data or how to utilize the data in your financial forecasting process please don’t hesitate to reach out to us!
