Praction Group » Unlocking Growth and Exit Opportunities for Chiropractors Through MSO Ownership

By Jeff Plowman, Praction Group founder

Why Chiropractors Should Own an MSO to Scale Their Practice and Plan a Profitable Exit

Chiropractors aiming to expand their practice through organic growth or acquisitions often face significant operational challenges. A powerful solution to these challenges is creating a Management Services Organization (MSO) that they own. Not only does this strategy streamline business operations and improve scalability, but it also sets up a robust framework for attracting investors and creating a viable exit strategy. In this post, we’ll explore the benefits of chiropractors establishing their own MSO and how it can facilitate business growth and long-term success.

What is an MSO and How Does It Work?

A Management Services Organization (MSO) is a separate legal entity that provides non-clinical administrative services to healthcare practices. These services typically include billing, human resources, IT, marketing, compliance management, and more. By separating clinical operations from the business side, chiropractors can focus solely on patient care while leveraging the MSO to handle the administrative burdens.

For chiropractors, owning an MSO means having control over the entire practice’s business infrastructure, which can lead to operational efficiency, scalability, and more attractive investment opportunities.

The Benefits of Chiropractors Owning Their Own MSO

1. Streamlined Operations for Organic Growth

When chiropractors own their MSO, they can create a streamlined, efficient business structure that supports organic growth. With non-clinical tasks handled by the MSO, chiropractors can spend more time focusing on patient care and building their reputation. Additionally, the MSO’s centralized structure allows for consistent processes across all locations, making it easier to add new services or expand the patient base without the operational headaches of running everything solo.

2. Efficient Expansion Through Acquisitions

An MSO can facilitate rapid expansion through acquisitions of other chiropractic practices. The MSO provides a ready-made infrastructure that can easily absorb new practices without the need to rebuild or restructure their operational systems. This setup reduces the complexity of merging practices, integrates new locations faster, and ensures consistent administrative processes across all entities. By doing so, chiropractors can quickly scale their operations and maximize the value of acquired practices.

3. Increased Attractiveness for Investors

Healthcare investors are increasingly looking at MSOs as a vehicle for growth in the chiropractic space. By owning their MSO, chiropractors can make their business more appealing to investors who value the stability, scalability, and revenue diversification an MSO offers. Investors are attracted to MSOs because of their recurring revenue models, reduced operational risk, and the ability to support multiple clinics under one organizational umbrella. Chiropractors with a well-established MSO can easily raise capital for further expansion or improvement, accelerating their growth trajectory.

4. Better Financial Control and Cost Savings

When chiropractors control their own MSO, they have more leverage over costs and financial management. MSOs can negotiate bulk pricing for supplies, software, and services, leading to significant cost savings. By centralizing non-clinical functions and pooling resources, chiropractors can reduce the overhead expenses associated with running a single or multi-location practice, improving profitability.

Additionally, owning the MSO provides better control over cash flow and budgeting, allowing chiropractors to strategically allocate resources to fuel growth.

5. Optimized Exit Strategy for Chiropractors

For chiropractors considering an exit strategy, owning an MSO adds significant value to the practice. An MSO-managed practice is more attractive to potential buyers or healthcare investors because it reduces operational risks and ensures that business operations continue seamlessly after a sale. The separation of clinical and administrative functions makes it easier for a buyer to integrate the practice into their portfolio without the burden of managing day-to-day business tasks.

Furthermore, an MSO creates opportunities for a higher practice valuation. Investors or buyers recognize that the MSO infrastructure provides a solid foundation for future growth, making the practice a more desirable acquisition target.

How Chiropractors Can Leverage Their MSO to Attract Capital

Owning an MSO positions chiropractors to raise external capital more easily. Investors are more likely to provide funding to an MSO-backed practice because it has a scalable and stable business model. Chiropractors can use this capital to expand their operations, acquire new practices, or invest in new technologies to enhance patient care.

Additionally, the revenue streams generated by an MSO can provide chiropractors with a consistent source of income, allowing for reinvestment into the business or the ability to exit while retaining a portion of ownership in the MSO. This dual approach creates flexibility for chiropractors who are considering both growth and future financial planning.

MSOs: A Strategic Advantage for Chiropractic Expansion and Exits

For chiropractors looking to scale their practices, optimize operations, or position themselves for an exit, creating and owning an MSO is a highly strategic move. It allows chiropractors to grow organically or through acquisitions, attract investor interest, and maximize the long-term value of their practice.

By separating clinical services from business operations, chiropractors gain more control, financial flexibility, and operational consistency. As more healthcare investors recognize the value of MSOs in the chiropractic space, those who own and manage their MSO will be better positioned to attract capital, expand their practices, and achieve a profitable exit.

Call to Action: Ready to take your chiropractic practice to the next level? Consider creating your own MSO for growth and long-term success. Contact us today to learn how we can help you build a scalable, investor-ready MSO that aligns with your expansion goals.