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8 Pitfalls for Startup PT Practices

Learn how to sidestep some common obstacles that face startup PT practices. Check out the top 8 pitfalls for startup PT practices.

Melissa Hughes
5 min read
January 11, 2019
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When I was growing up, I used to love watching Indiana Jones reruns with my dad. Whenever one of us found good ole’ Indy playing on TV, we’d plop down and watch the rest of the movie, regardless of how many times we’d seen it. I especially loved watching Indiana duck, dodge, and outsmart every booby trap he encountered during his adventures (the giant rolling boulder was always my personal favorite).

While founding a startup practice may not be as adrenaline-inducing as jumping over a spike-filled pit, there are plenty of traps that prospective business owners want to avoid when they venture into the marketplace. So, in honor of America’s most influential archaeologist, we’re going to help you duck, dodge, and outsmart these eight common pitfalls for startup PT practices:

1. Nonexistent Business Strategy

A solid, comprehensive business strategy is a company’s foundation: if constructed well, it acts as a stable, strategic base upon which the business can grow. But creating a strategy isn’t as simple as saying, “I want to be successful—and increase my business by 10% every month.” A business strategy is, as this source states, a “coherent set of analyses, concepts, policies, arguments, and actions that respond to a significant challenge or opportunity.”

When creating a strategic plan, business owners must be thorough. As we write in this blog post, you can create a solid strategic plan by including these six elements:

  1. Executive Summary: a brief summary of the entire strategic plan
  2. Elevator Pitch: a brief description of the clinic (includes “target patient demographics and specialized treatment modalities”)
  3. Mission Statement: the overall goal of the practice
  4. SWOT Analysis: an analysis of the practice’s strengths, weaknesses, opportunities, and threats
  5. Measurable Goals: a list of measurable short- and long-term goals
  6. Key Performance Indicators (KPIs): a list of tracked metrics that can cover everything from finances and therapist productivity to patient retention and loyalty.

2. Too Little Financial Backing, Too Late

One of the most important requirements for launching a successful startup is the financial backing that gets it off the ground. Whether you already have the required capital—or you’re applying for loans—you must ensure that money covers all the upfront costs of running a business, including:

  • fixed costs (e.g., rent, equipment, and EMR/software),
  • variable expenses (e.g., utilities, supplies, and continuing education), and
  • labor costs (e.g., salaries and benefits).

Proprietors also need to avoid unnecessary—or overly burdensome—equipment expenses. As Robert Snow, DPT, OCS, ATC, CSCS, says in the The PT’s Guide to Starting a Private Practice, “If the new piece of equipment does not generate revenue, then don’t buy it. I ask every equipment rep this question: how does this reimburse?”

Sometimes getting creative with equipment purchases (for example, buying $100 ultrasound and electrical stimulation units as opposed to a $3,500 combo machine), or even renting equipment might be the best—and cheapest—route to take. Ultimately, every business owner needs to conduct his or her own research to decide what’s best for his or her individual practice.


Because fundraising can be so challenging, this article actually recommends securing financial backing as soon as possible: “It is challenging to ‘sell’ investors on a high-risk venture. It is better to get investors involved as early as possible and let them ‘sell themselves’ along the way.”

3. Lack of Lackeys

It might be tempting to operate a business as a one-person show. But there’s great strength in knowing when to admit that the load is too heavy, step back, and hand the reins over to someone else. This is especially true in areas where a business owner might not be super well-versed—like accounting or bookkeeping.

PT proprietors can save buckets of time by hiring the aforementioned accountant or bookkeeper, or by outsourcing billing and credentialing. That free time could then go toward other things—like treating more patients, mentoring staff PTs or PTAs, or even just reducing stress levels. (Owners can suffer from burnout, too!)

4. No Deviation from the Market

One of the most important things for a business to do is to find a market niche. Having a practice specialty—or even just offering a unique service (like hydrotherapy or dry needling)—can draw many patients to a practice, especially if the service is underrepresented in the local market.

Kaci Monroe, DPT, even suggests taking practice differentiation a step further by selecting unique continuing education courses. “I take the courses that are going to put me apart from someone else,” Monroe said in this blog post. “Don’t go to the cut-and-dried classes; go to something that’s going to give you a certification in something, because people want to see that you’re certified in something.”

A practice that doesn’t stand out is a practice that runs the risk of fading away.

5. Poorly-Picked Location

This point works in tandem with the previous one: if a startup PT practice pops up in a location that’s already saturated with PTs, that business is going to have a tough time making waves and pulling in a consistent revenue stream. Conversely, if a practice is located in a rural area, the owner may find that he or she is less concerned about matching the competition, and more concerned about creating ease of access and retaining patients who may not be willing to journey out for therapy.

Every location is also tied to a unique mix of demographics that contributes to the patient population, and that, in turn, affects the service demand. In other words, if a PT opens a pediatric therapy clinic in a city that doesn’t allow minors (like Sun City West, for example), he or she is going to have a tough time keeping the doors open.

To further complicate things, every geographic location generally comes with unique payer and regional rules in everything from direct access laws and tax implications, to reimbursement rates and payer availability. Business owners must research everything that makes the region tick—especially if they’re looking to open a location in a new state.

6. Subpar Relationships with Referring Physicians

While direct access can be a gamechanger when cultivating a pool of patients, the unfortunate truth is that only some states allow PTs to cut out the middleman entirely and go straight to the patients. And even in unrestricted direct access states, physician referrals can be helpful for maintaining a consistent stream of new patients. So, it’s wise for PTs—business owners especially—to establish good rapport with local physicians. Whether it’s through sharing meaningful data or the ever-popular goodie basket, it’s important to develop strategies for appealing to physicians.

7. Ill-Fitted Hires

While hiring an employee based on education and experience may seem like a good idea, employers need to pump their brakes and take a moment to consider more than a candidate’s credentials. In other words, don’t just hire for skill; hire for culture, too. To hire for culture, craft interview questions that dig into the meat of the candidates’ personalities. Do they share the same core values as the company? What motivates them on a day-to-day basis? As Heidi Jannenga states in this founder letter, “I ask myself, am I comfortable with the thought of spending five days a week with this person? And more importantly, can we communicate effectively?”

When it comes down to it, technical skills can be taught, but values, communication preferences, and synergy with coworkers (or lack thereof) come as an already-packaged deal.

8. Leadership Deficiency

Every organization, from two employees to 200, needs a leader: someone to blaze the trail and determine the company’s overall direction. In fact, this article posits that every burgeoning business needs “a person with vision, know-how, focus, and a growth mindset.”

The boss needs to be able to consider the big picture and ask things like, how do we attract patients one, five, or 10 years from now? Or, how does the business need to evolve to be more profitable? The company’s leader also must be able to handle tough decisions and tasks—like addressing poor performance or making financial cuts—as well as sorting through more mundane administrative duties, like managing rental agreements and health plans.

Filling the boss’s shoes takes a decent chunk of time—and as a PT proprietor, it may be tough to relinquish time with patients to get everything done. But it’s a necessity that will help keep the company afloat and ensure future success.

Now that you know how to sidestep business pressure traps and pick your way around a regulatory pit of snakes, it’s time to kickstart your new business. Who knows? At the end of the day, you might end up flying a biplane into the sunset after your latest marketplace conquest.

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