Welcome back to Wednesday's Spotlight. Today, we are looking at a business that appears simple on the surface. See patients, treat injuries, collect a fee, repeat. The catch is that the economics are tied to the practitioner's time, insurance reimbursement has fallen sharply, and maintaining quality means resisting the volume game even when overhead remains fixed.

Dr. Mike Bhatt has spent more than three decades building a chiropractic career around musculoskeletal and sports medicine. Born in Manchester, England, and raised in Canada from age seven, he completed his chiropractic education in 1992 and moved to Austin, Texas. He co-founded the Spine and Rehabilitation Center, one of the first multidisciplinary spine clinics in Central Texas, where chiropractors worked alongside orthopedic surgeons, physiatrists, and physical therapists. In 2007, he left to start Pinnacle Sports Performance and focus on athletes. Since 2013, he has also worked as part of the medical staff serving the PGA Tour and PGA Tour Champions.

Pinnacle was inexpensive to get off the ground because Dr. Bhatt operated out of an existing gym and leased space. He estimates a basic clinic could be started for roughly $25,000, mainly for treatment tables and equipment, although individual devices today can cost $50,000 to $60,000. He kept the practice deliberately low-volume. New patients received an hour-long session, follow-ups lasted 30 minutes, and a typical treatment cycle ran for four to six sessions over two to three weeks. His cash rate was $150 for a new patient and $90 for follow-ups. Rent, staff, equipment, and other overhead typically consume about 35% to 40% of revenue.

Dr. Bhatt intentionally focused on athletes who are more likely to adhere to their exercise and rehabilitation programs. His treatment combined manipulation with dry needling, acupuncture, active-release therapy, rehabilitation exercises, stretching, and posture work. The sports focus also opened a valuable referral network. He travels roughly 7 to 8 weeks a year with the PGA and PGA Tour Champions, and his work has extended to professional and collegiate athletes.

He says an insured patient visit could reimburse roughly $220 when he entered practice in the early 1990s, compared with around $70 in some cases today. He dropped certain insurance plans when reimbursement became too low to justify the cost of delivering care. COVID created another disruption when gyms closed and one location where he saw most of his patients shut permanently. 

Years of hands-on treatment also took a toll on his shoulders and forced him to reduce his hours. In 2022, he sold the practice to an associate who had trained with him but continued treating patients there part-time. Because he did not own the building, the sale primarily consisted of patient records, treatment equipment, and other practice assets.

Here is what the clinic eventually taught Dr. Bhatt about the business. 

Revenue is tied directly to how many patients a practitioner can physically treat, and increasing volume often means spending less time with each one. Dr. Bhatt responded by turning recurring patient problems into products that could generate revenue outside the treatment room. He wrote an Amazon best-selling illustrated children’s book, Kenzi Sits Up Tall, and an accompanying web app aimed at improving the mind, body, and spirit complex for kids and adults. 

He also built Prosper With Posture, a posture and ergonomics education business, and patented SwingBak, a posture-focused foam roller now used by roughly 30 professional sports teams, PGA Tour players, collegiate programs, and recreational athletes. SwingBak is sold online, with its early professional adoption largely driven by Dr. Bhatt’s sports network. The clinic remains the foundation, but the books and physical products have extended his business to other avenues.

Phoenix salon-suite portfolio asks $795K on $917K revenue and $194K in-place NOI

Belle Vie Salon Studios is selling three Phoenix-area locations with 80 salon suites across 16,560 square feet. The company holds three NNN master leases and rents individual studios to independent beauty professionals. The listing reports roughly $917,000 in annualized revenue, $193,705 in current NOI, and $232,793 in contracted run-rate NOI, putting the $795,000 asking price at about 4.1x current NOI or 3.4x contracted NOI. If the remaining vacant suites fill at existing rents, the seller projects NOI of roughly $325,000. The portfolio has no employees beyond contracted janitorial services, includes about $400,000 of FF&E, and carries $55,731 a month in rent. SBA financing is not available.

Translation, if you own one: this is why salon suites can look bigger than they are. $917,000 in annualized revenue supports only $194,000 in current NOI after the master leases and operating costs are paid.

Source: Luxury Salon Studios Portfolio

Your "adjusted EBITDA" is probably higher than the number a buyer will accept. Friday, we show where the QoE haircut comes from.