The Competitive Environment Analysis section of your physical therapy business plan provides an opportunity to review your competition and the state of the rehabilitation market. The lending institution(s) you approach for funds likely know very little about the rehab market nationally, regionally, or locally. In addition to educating them on the rehab market’s potential, this is your chance to explain how your clinic will be superior to any service area competition. The goal is to assuage fears lenders might have about the potential success or failure of your business enterprise.
As we recommended in our earlier “overview” Blog on PT Business Plans, describe your clinic’s local demographics. This is important to an understanding of both your patient mix and your potential Reimbursement Rate from your state and regional Providers. For example, if the local area (five-mile radius) is largely residential, you may not have many worker compensation cases. On the other hand, a mix of industrial businesses and residences speaks to a different patient mix, perhaps one with a small percentage of worker comp patients. As another example, if you have a mature local population in older neighborhoods, or with assisted living residences, you would likely see a fair amount of Medicare patients.
Identify your service area competition
You probably already know who your potential competitors are, or at least you think you know. Take the time to conduct additional Internet research and to drive around and view them. Be prepared to list them in your Business Plan, along with a short description of their patient offerings, including the estimated square footage of the clinics.
Gather competitive intelligence
You will need to know, or at least opine, on what market segments they serve, what benefits they offer, and why patients go to those competitor clinics.
When describing these competitors, “compare and contrast” their wellness and/or therapy offerings, facilities, locations (including available parking and nearness to public transportation) to that of your clinic. Point out the strengths of your new clinic’s offerings compared to those of your competitors.
Find a way to walk into these competitor clinics to observe for yourself. If they exhibit or attend local or regional conferences or trade shows, make note of their presence and how they are marketing themselves to the public.
Analyzing your findings
For purposes of your Business Plan, simply listing out certain information will not be helpful to your potential lender(s). They need to be told why certain items/offerings of a PT practice important and why other items/offerings are not.
Ask yourself the question, “How am I going to compete with that PT clinic?”.
Are there specific target market needs not being properly met?
Is there a segment of the market that they, or you, have overlooked?
Is there a service that your prospective patients want that your competition does not supply?
Remember, the goal of your Competitive Environment Analysis is to identify and expand upon any competitive advantage that you might have. You want to emphasize any benefits that your proposed business will offer, especially those that your service area competition can’t or won’t offer.
Your opening paragraph in the Competitive Environment Analysis should outline the competitive environment in your service area, who your proposed competitors are, how they approach the market, and any other relevant details about them. The second and following paragraphs should detail your competitive advantage, and explain why and how your clinic will be able to compete and ultimately be successful. Your lender(s) will want to be confident in your knowledge of the competition and that your plan will enable your new clinic to be successful.
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