When it comes to climbing the ladder of success, Louie Anderson once told Eddie Murphy, "I started out mopping the floor just like you guys. But now...now I'm washing lettuce. Soon I'll be on fries; then the grill. And pretty soon, I'll make assistant manager, and that's when the big bucks start rolling in." (Well, to clarify: Louie Anderson’s character said this to Eddie Murphy’s character in the 1988 classic Coming to America.) I love this quote because it perfectly illustrates the way small steps lead to accomplishing big goals. But sometimes, the road to success isn’t always so linear—nor is leadership or ownership the only way to make the “big bucks.” In fact, success may not have anything to do with running the show at all—and that’s certainly the case for physical therapists looking to progress their careers. With that in mind, here are seven potential red flags for any PT thinking about starting a practice:
1. You feel like it’s the only way to move your career forward.
There’s no doubt that being a physical therapist is an amazing job. But as Meredith Castin, PT, DPT, founder of The Non-Clinical PT, writes, “As fulfilling and enjoyable as patient care can be...sometimes we start to wonder what else is out there. We might become injured or ill, and we’re no longer able to work in a clinical setting. We might be bored, or feeling stifled financially. Perhaps we simply want more flexibility or growth in our careers. Whatever the reason, there are plenty of non-clinical jobs for physical therapists out there.”
Depending on your long-term career plans, practice ownership may be the next logical step. But your options aren’t limited to being a staff therapist or owning and operating a clinic. Furthermore, if you choose to hang out your shingle, you should do so because you really want to—not because you feel like it’s your only way to move up. Owning a PT practice is hard work, and if your heart’s not in it, you’re going to have a bad time. As practice owner Chad Novasic has told us in the past, “Your purpose has to be internalized.” Plus, there are lots of ways to advance your PT career without opening or purchasing a practice. Roles to consider include:
- clinical reviewers,
- tech consultants,
- PT marketers,
- rehab liaisons,
- sales representatives, and
- telehealth therapists.
For more information on these roles, check out this post from The Non-Clinical PT.
2. You’re not ready to treat your practice like a business.
Starting a pro-bono clinic is an incredibly admirable pursuit. But chances are, if you’re starting a private practice, you plan on making a profit. (After all, you’ll have a tough time focusing on providing exceptional patient care if you’re constantly stressed about your finances.) And making a profit requires more than tenacity and self motivation: it requires (1) keeping a close and consistent eye on metrics and trends within your practice, (2) understanding how to interpret the data, and then (3) making improvements and changes based on your findings.
During a recent webinar, WebPT President Dr. Heidi Jannenga and Director of Product Russell Olson covered the essential metrics every practice should track to ensure success:
- Net Promoter Score®
- Number of Referrals by Source
- Patient Arrival Rate
- Patient Dropout Rate
- Profit Per Visit
- Claim Denial Rate
- Payment Rates Per Payer
- Days Sales Outstanding
- Patient Payment Collection Rate
You’ll also need to keep an eye on billing-specific metrics, including the ones we list here:
- Days in Receivable Outstanding (a.k.a. Daily Sales Outstanding or DSO)
- Percentage of Receivables Over 120 Days
- Net Collection Rate
- Denial Rate
It goes without saying that all of this data tracking requires a lot of time and organization. And as I mentioned above, once you have the data, you have to know how to use it to make intelligent business decisions that’ll support your practice’s financial health. So, if you’re not ready to spend a lot of quality time with spreadsheets and reports, then you may not be ready for practice ownership. That being said, tools like WebPT Analytics can help you keep your tracking efforts streamlined and accurate—and take a lot of the manual work out of the reporting and analysis.
3. You’re not comfortable marketing yourself.
If you want to run a successful business, you can’t shy away from marketing yourself and your services. Unfortunately, many would-be clinic owners believe they can make it on physician and insurance referrals alone. But in today’s competitive healthcare market, PTs are finding it harder and harder to build sustainable businesses on a foundation of MD referrals. Shrewd clinic owners have already recognized this, and they’re putting more time and effort into marketing their value prop (i.e., the benefits of their services) to the people they are best suited to treat (i.e., their ideal patients). And consumer-facing marketing—especially the self-promotional kind—doesn’t come easy to everyone.
That being said, you don’t have to go it alone: hiring a freelance marketer or a marketing agency can take a lot of the guesswork off your plate. But if you don’t have a huge marketing budget, tools like WebPT Reach that can help ease the burden of marketing a PT practice by automating ad and email campaigns, tracking patient satisfaction, generating positive online reviews, and ultimately, boosting your clinic’s visibility.
4. You’re not willing to make personal sacrifices.
In this interview for Meet the Boss, Facebook’s former head of marketing, Randi Zuckerberg, discusses what she calls “the entrepreneur’s dilemma.” According to Zuckerberg, every business owner has five things they can prioritize in life:
- building a great business;
- getting a good night’s sleep;
- spending time with family;
- staying fit; and
- maintaining friendships.
The dilemma, Zuckerberg explains, is that business owners can only choose three. Want to grow your practice and still have energy to devote to family time and a good night’s sleep? Friendships and rock-hard abs may need to take a backseat—and you need to be prepared to make those sacrifices.
While some business owners argue that you can, in fact, have it all, many others agree that running a business—a successful one, anyway—often means making some tough decisions. And whether or not you agree with Zuckerberg’s assessment, there’s no doubt that being a PT practice owner demands a lot of time and energy.
5. You hate negotiating.
Okay, just because you don’t like to negotiate, doesn’t mean you shouldn’t open a practice. However, if the thought of going to bat against insurance payers to push for better rates has you paralyzed with fear, you might want to think long and hard about your decision.
As a practice owner, you have to be willing to lay it all on the line with insurance companies. When asked what he wished he’d known before starting his practice, Novasic said, “I wish someone would have told me how to negotiate with insurance companies. I had no clue. It took me way longer than I thought. I thought all you had to do is give them a call. It’s not that easy. For us, approximately 80% of the insurance contracts were closed. You couldn’t get in to them without banging your head against a wall.” (For expert tips on how to approach payer contract negotiations, download this guide.)
6. You avoid confrontation.
Insurance payers aren’t the only entities you have to confront. If you’re a business owner, be prepared to have the occasional tough conversation with your staff—whether that’s a discussion around salary, budget cuts, or performance. And as the “big boss,” it’s up to you to not only have these conversations, but also bear the brunt of responsibility when things go awry.
Strong leaders also have to set an example for their staff and demonstrate acute emotional intelligence. In this article for Insperity, HR specialist Amanda Novakovic writes, “It’s easy for managers to brush the issue under the rug. They often don’t know how to handle the situation or emotional employees. But avoiding these conversations can make the situation even worse. The longer you wait, the more it can affect the workplace environment and productivity.”
7. You don’t have a long-term game plan.
As Novasic explained, “There are so many things you need to do manually like creating a business plan, marketing plan, and budget.” But first, Novasic suggests fine-tuning your vision by creating a mental picture of your future practice. “Visualize what your clinic will look like in three years. What is your day like?” He advises future practice owners to imagine everything from the type of services they will provide to the color of the walls and carpet in their clinic. Once you have that vision in mind, write it down! Then work backwards to create a plan to get there.
But planning for your future goes beyond the aesthetics and characteristics of your clinic when you first open your doors. You should consider your long-term goals, too. Ask yourself questions like:
- Do you plan to grow or remain small?
- Do you want to stick with physical therapy services only or branch out into other rehab or wellness services?
- Do you want to grow into multiple locations or stay with one?
- Will you remain a sole proprietor or bring on partners?
- Do you plan to run this practice for the remainder of your career or sell it to someone else someday?
There’s no right or wrong way to answer these questions, and it’s okay if you can’t answer all of them right now. But, they will provide direction and help you pave a path for the future of your practice, which means it’s never too early to mull them over.
So, there you have it: seven reasons why practice ownership may not be the right move for you. What are some other things to consider before starting a PT clinic? Leave us your thoughts in the comment section below!