Are you still experiencing the consequences of a poor business decision?

The reality of owning and operating any small business involves making decisions every single day.

These decisions range in size from every day operational duties to long-term goal setting and planning.

Unless you’re perfect, you’ve probably messed up one or two of these decisions. You may have not even “messed up!” In business, situations and circumstances continually evolve and change. A decision that appeared to be correct at the time might end up haunting you in the future.

Old business decisions can lead to a phenomenon that we refer to as the “Stupid Tax.”

Let’s use a story to further highlight this concept:

The Shoe Maker

You’re a shoe maker fresh out of the shoe making academy. You’re eager to serve the world and get everyone in a pair of your shoes. You decide the best way to accomplish this is to offer a “Monthly Shoe Program.” Customers who sign up for this program receive a new pair of custom made shoes every month for only $5. Your shoes are worth much more than $5, but you want to hit the ground running and make a name for yourself!

The program is a huge hit! Soon, customers are flocking to your door and lining up for their own $5 shoe program. Quickly, your little shop becomes saturated and the pressure of small profit margins begins to constrain your efforts.

You decide the best thing to do is to discontinue the $5 shoe program and continue to offer your high-quality shoes for a more justifiable price.

The transition isn’t easy. A few new customers looking for the $5 program voice their displeasure and leave forever.

However, word continues to get around about your high-quality shoes and, eventually, business picks back up. Your new business model is a success!

Meanwhile, the old $5 model still has a following and continues to “plague” your business. Being a good businessman, you continue to honor this commitment to your existing customer base.. and feel it in your gut and wallet every time!”

The Stupid Tax

Our official definition of the Stupid Tax is “something you did once upon a time only to realize later it was not a good idea or fit with your new model.”

How do you deal with Stupid Tax? You honor your obligation; however, you do not start any new people on this program.

The Stupid Tax is a not-so-friendly reminder of past decisions made. It can be frustrating, especially during a transition period but it also serves as a great reminder of the progress and growth you and your business have made! Now, just like regular taxes, the Stupid Tax must be paid. There’s no avoiding it. With time, the Stupid Tax should become minimal and eventually fade away.

In the chiropractic world stupid taxes are commonly suffered when recovering from:

  • Failed business partnerships
  • Consequences of Practice Management agreements
  • Poorly structured patient care plans and payment agreements

As frustrating as these challenges are, they will pass.  Until you reach that point, chalk up the Stupid Tax to the consequences of improving your business. Remember, a tax is only applied when one obtains something of value.

Dr. Nathan UnruhDr. Nathan Unruh, CXO, SIDECAR


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