Before you get overwhelmed thinking “How much does it cost to open a physical therapy clinic?" or wondering about the requirements to open a physical therapy clinic in your state, you’ll want to go over why it’s important to create a business plan and strategy. This is the time when the physical therapist becomes a business guru. But don’t worry, we’ll walk you through the steps to take so start your own practice.
Below you’ll see the steps for starting an outpatient PT clinic and some answers to frequently asked questions that should help you get started. Read more to learn about how much to budget, the equipment requirements, and other important details.
What to Know About PT Clinic Requirements
To open a PT clinic, you will need to meet specific state requirements. Every state is different, but you will need to meet the legal requirements to not only practice as a physical therapist in your state but to run a PT business. These may include:
- A Doctor of Physical Therapy (DPT) degree through a program accredited through the Commission on Accreditation in Physical Therapy Education (CAPTE)
- A DPT license from passing the National Physical Therapy Examination
- State and local permits
- Medical malpractice/liability insurance
- Experienced professionals such as an attorney, accountant, banker, and insurer for business liability coverage and hazards
- General business license
- An Employer Identification Number (EIN), which serves as your federal tax ID number
- State tax ID number, if different in your state from the EIN
- A strategy for managing payment plans and insurance.
The American Physical Therapy Association sets the Standard of Practice for Physical Therapy, which includes specific details on legal requirements for practices, the standard of care expected from physical therapists, office policies, and scope of service. Clinic operators have to abide by local, state, and federal laws. You will also want to check with your town hall and landlord, if you have one, for their list of requirements. This would be a great time to engage a lawyer to help you learn and navigate all the rules you will need to abide by.
Steps for Starting a Physical Therapy Clinic
Step 1: Write a Business Plan
Creating a business plan is the first thing you need to do to set up the foundation for your company. This plan includes everything from your goals to market research, preparing you to talk to banks and investors.
There is no right way to go about creating a business plan, but it does need to be thorough. Traditional business plans, the most common, have a standardized structure and are detailed. Lean start - up plans use a standard structure but summarize only key points of your business, so you can quickly draw them up and submit them to lenders or investors within a few hours.
Need help creating your physical therapy clinic business plan? Go here.
Step 2: Create a Budget
Once you have an idea of how things will work with the business plan, it is now time to figure out what it will take to get that plan off the ground. Make a list of upfront/one - time fees (e.g., renovation, equipment) versus ongoing payments (e.g., rent, insurance), and get your budget spreadsheet started.
The following physical therapy clinic budget example may help:
- Renovation costs
- Exercise equipment
- Treatment tables
- Other therapeutic equipment
- One - time use items and sterile equipment
- Cleaning supplies
- Your salary
- Staff salaries
- Software to book patients or bill patients
- Computer equipment
- Website development
- Marketing expenses
Remember not to get too overwhelmed. Most new businesses aren’t profitable until after the third year, so give yourself some time. Buying just the essentials is a good way to start. That way you can add on as you grow your client list.
Step 3: Lean into Your Specialty or Niche
Knowing your specialty in the early phases of starting your clinic can help you strategize your location and potentially acquire financing (it will help to know the need of this specialty in your area and the number of other PTs with this specialty within a 10-mile radius).
There are eight branches of physical therapy that you can choose to specialize in:
- Bone health
- Joint health
- Nerve injuries
- Congenital conditions
- Sports injuries
- Pain therapy
- General physical medicine
- Brain disorders
Taking a specialty a step further, you can create your business around your area of focus. Specialize in sports injuries? Create a PT practice on preventing and recovering from teen sports injuries. Examples of Niche PT markets include:
- Performing arts PT
- Musician therapy
- Obesity management
- Women’s health
- Teen sports
- Urgent care PT
- Oncology rehabilitation and management
Knowing your niche will help you budget for the space and equipment you’ll need. It will also help you location - scout, as you wouldn’t want two performing arts physical therapists on the same block.
Step 4: Make Important Decisions
A few things to decide before you move forward:
- Solo entrepreneur or partnership? While starting this PT practice on your own may have been the initial dream, partnering with another practitioner or a gym or opening a franchise may offer more guidance and structure.
- Cash-based or insurance-based? Will you accept health insurance -- and if so, which ones? You may want to consult national groups and resources to ask other therapists how they made this decision. If you decide to accept only cash from your patients, you’ll need to research a competitive rate. And if you choose to accept insurance, you’ll need to get insurance credentialing, which usually requires the following:
- Your tax ID number
- Malpractice insurance
- National Provider Identifier (NPI)
- License to provide PT services in your state
- Clinic location.
Step 5: Find an Office
To find the right first office space, consider location, price, size, and competition. According to one study, 62% of patients select physicians based on the convenience of a location. Ideally you'll want to choose an office that is easy to get to, has excellent parking options, and is handicap accessible.
But being in a high - volume area might come at a larger expense, so you will want to consider how much competition your niche has and whether your patients would be willing to travel to a more remote option. You can review US census data or your city’s website to learn your community and competitive demographics.
How big of a clinical space are you even looking for? Team size is another large factor in choosing an office space. Here are some suggested guidelines of PT clinic space based on the number of practitioners with you at the same time:
- 1,000–1,500 square feet for a small facility (2–3 PT/OT)
- 2,500–3,500 square feet for a medium facility (4–7 PT/OT)
- 4,000+ square feet for a large facility (8+ PT/OT)
Learn more about space and sizing requirements for PT Clinics
Step 6: Acquire the Necessary Equipment
You want your clients to feel that they have everything they need to get better when they come to your practice. It's important for you to find the right equipment and to be sure that it looks neat and tidy in the therapy room.
You may want to start with the basic essential equipment, like dumbbells, TENS units, hot and cold packs, and massage tables. Then splurge on a few larger pieces of necessary exercise equipment, depending on your specialty. Remember that not everything needs to be brand new. Think creatively about acquiring high - end pieces. Perhaps you can rent them or buy from a retiring PT. Also check out FB groups and local yard sales.
Step 7: Hire Staff If You Need Them
Many people start off as sole practitioners, but you may bring on an assistant, receptionist, or second physical therapist as your business grows. However, if you plan to open a franchise, you may want to partner with one that offers administrative staff as well as other physical therapists or health professional expertise and marketing budgets.
As a solo practitioner, you’ll know you’re ready to bring on more staff and expand your workforce if:
- You’re losing too much time on nonessential tasks
- You’re feeling overworked or burnt out, and not getting bills paid and processed in time
- Your client demand can afford a new team member
Remember that a lot of billing and booking patients can be done with software. But an assistant who can process payments could also help with greeting customers, changing and washing sheets and towels, social marketing, and customer acquisition.
Before hiring anyone, consider the size of your building, the number of patients you'd like to see, your niche, and other factors to decide how many staff members to bring on board. You could also have other healthcare professionals use the space and pay you a fee. You might offer yoga, acupuncture, or nutrition and wellness consultations as part of the practice, but clients pay the expert, and the expert gives you a percentage. This can allow you to offer more -- but not pay more.
Step 8: Start Marketing & Partnering
Branding allows you to market your physical therapy office in a way that makes it easy to identify. You might brand your business with a specific mascot or an attractive logo. Many offices have a color theme or uniform to help their practices stand apart from other providers. Or consider a tagline that helps differentiate your service.
- Build a website: Create a website that not only looks great but also allows people to book online and shows the wealth of your services.
- Focus on SEO: Use a template that allows for search engine optimization. A weekly or monthly blog will help grow your keywords and create a natural, conversational way to talk up your strengths.
- Tag local audiences: Use social media to post about your business. Just remember to use your 20+ allotted hashtags to bring in local customers. Show off your PT expertise as well as your local tips and tricks -- just to keep people coming. And be sure to tag local groups since this is how your customers will search. #BostonPT is a great example.
- Sponsor a booth or team: Local fair coming up? Ask friends to join you in a booth. Get involved in the community you serve. Even consider sponsoring a t-ball team!
- Buy social ads: And make sure they link over to book a consultation.
- Ask for referrals: Nothing beats word of mouth from happy patients!
When you market, you need to show your local community why your practice is the right choice for them. Consider marketing by sponsoring a local sports team, through Facebook or Instagram ads, by developing a social media presence, and by using patient referrals.
Frequently Asked Questions for Starting a PT Clinic
What are the costs of running an outpatient PT clinic?
Costs will be different based on your location. But typical expenses that most PT clinics run into include rental fees for the office or building, medical equipment and supplies, exercise equipment, marketing fees, staff payroll, medical malpractice insurance, liability insurance, and utility charges.
How much does someone with a PT outpatient clinic make a year?
The average private practice brings in between $120,000 and $780,000 per year in revenue. Typically, between 12% and 20% of that amount represents profit. Variables that may affect your revenue include:
- The number of physical therapists working in the office
- The number of billable hours completed
- The consistency of patient referrals
- The cost of replacement equipment
- General overhead costs, such as the cost of utilities or the building
Is there an example of a budget I can use to start a PT Clinic?
Yes, example budgets are available online. You can find one here offered by Get Breakthrough that shows a general spreadsheet of expenses.
What challenges should I expect in my first few years of running a PT clinic?
During the first few years of running a clinic, you may run into challenges such as staffing shortages, lulls in clientele, high marketing costs, and a limited inventory of equipment. As your PT clinic grows, you likely will eliminate some or most of these challenges or become comfortable knowing that lulls do end.
What other specialties could I add to my PT practice?
Some specialties to add to a PT practice could include acupuncture, massage therapy, chiropractic services, and personal training. Make sure to consider your experience and skills, as well as those of your staff, and thoroughly research any state or local requirements for these types of businesses.
There are many considerations to keep in mind as you start your own physical therapy business. By focusing on your basic business plan first and then going over your goals for your business, you can come up with a plan that will help you meet state and federal requirements, grow your business, and become a provider others can rely on.
Image courtesy of istock.com/Hope Connolly