• 5 Critical Musts when Starting a Physical Therapy Private Practice

    February 28, 2021 | Ed Hershman
  • The dream for so many physical therapists is the opportunity to be independent and autonomous in your own private practice. But what often comes as a surprise is that the ramifications of a physical therapy clinic start up have far less to do with performing physical therapy than with preparation and business acumen. If you do not fix every detail before you open, your ability to operate becomes far more difficult.

    The pitfalls are not just substantive, but timely as well. Prioritizing the requirements necessary to be able to treat patients and actually bill for your services will earn you cash flow through better revenue management. And a better night’s sleep.

    Below are the five common mistakes therapists make when starting a physical therapy private practice.

    1. Location

    Location is very important for several reasons. First, you want to be easy to find. Good exposure to those driving by is free advertising. In addition, your clinic must have frontage and visible signage. While naming your clinic can be fun, the most important feature of the name is stating what you do by including “Physical Therapy”.

    Parking ease is key, as well. Not only do you need enough parking, but clinics in a cold climate need adequate snow removal and a safe walk from vehicle to indoors. Remember, your patients will be physically compromised, so negotiating snow and ice will be difficult and frightening.

    2. Clinic size and function

    Choosing the right footprint for your practice can be challenging. Base the decision on the amount and type of equipment you intend to have. Be sure to leave a space for patients to exercise. Certain pieces of equipment earn you money while providing much needed independent therapy for patients. This equipment may avail itself to enhancing your ability to multitask and effectively treat more than one patient at a time.

    Ideally, locate in a space that has room for future expansion to an adjoining space. Get a right of first refusal for the adjoining space so that you have the option when the time comes to expand while keeping your established address.

    3. Referral sources

    Do not open your clinic until you have five committed referral sourcesThe single biggest mistake physical therapy private practice owners make is to assume you will receive referrals once your clinic is open, or wait until it is open to pursue referral sources. Make sure your referral sources know you are opening your clinic in part “because you know you can count on their patient referrals”. They will want to know your location, hours, and what contracts you will have to bill patients for your services.

    4. Prioritizing staffing needs

    First and foremost, do not hire staff until your clinic is busy enough. Maintaining control when starting a physical therapy private practice is best accomplished with you as the sole employee. Your second hire should be a part-time administrative individual that can later become full time. Third, hire a PTA as soon as money is coming in. You are aiming for slow and steady growth! A healthy business allows you to pay incomes and benefits through cash flow. We recommend having four to six months of money available to pay your personal expenses during the clinic’s start-up period.

    Prioritize experience over credentials when choosing staff for your clinic. As illustration, an experienced PTA is as valuable as a PT but, even when paid well, is less expensive than a PT. Remember to staff for Medicare regulations, as well.

    5. Back office needs

    Long before you open your doors, research software packages to serve your back office needs. Be trained and ready to bill on your first day open. Most software requires the use of specific computer equipment. You will also have to make decisions about billing and collection in-house or with an outside service.

    Also before your opening, you should have all your credentialing and contracting complete and provider numbers in-hand.

    A couple of other loose ends to ensure are tied up before opening:

    1. Finance anything that can be financed.
    2. Finish your buildout and have equipment installed.

    Any failure to be well-prepared long before opening your physical therapy private practice may well cause a cash crunch and have a disastrous result. With adequate preparation and contracting out all start up needs, your clinic opening should be smooth and timely. Preparation, priority, and planning will see you through.