Our blog post today was written by WebPT member, Dr. Sam Esterson, PT, MA, MBA, DScPT. He is the owner of Esterson and Associates Physical Therapy. He is also the author of a well-received book written in 2003, entitled Starting & Managing Your Own Physical Therapy Practice: A Guide for the Rookie Entrepreneur. Dr. Esterson will be a featured guest on this month's webinar. Learn more here. Thanks to Sam for his wise words.
Those forward thinking and self-motivated therapists who possess a powerful drive to grow, are goal-directed, and have low blood pressure are ones who may be the best candidates to jump in, full throttle, and consider opening up a practice “on their own.” Sure, there’s much to consider and plan, but, if you are a therapist working in an environment where you are constantly thinking, “Gee, I sure could do this better, easier, more creatively, and/or more cost-effectively,” then, you may have “the itch.” The people who generally have this spirit are called “entrepreneurs.” An entrepreneur is one who organizes, manages and assumes the risks of an enterprise. The term comes from the French, entreprendre, meaning, to undertake. Entrepreneurs demand as much of themselves as they do of others. They have a passion for their dreams and do not easily take “no” for an answer. Entrepreneurs see opportunity when others see potential failure. They see the proverbial glass half-full while others perceive the glass half-empty.
There are some therapists who may think that by opening their own practice, they will become their own boss and not have to take orders from others ever again. This concept cannot be further from the truth. In fact, once you open your own business, you will have many bosses, including the referring practitioners who have clinical demands on you, insurance companies who direct your care by virtue of how they reimburse you for services rendered, patients who have a knack for manipulating your time and efforts, and even your staff who place constraints on you in many ways.
In the “old days,” those of us who stumbled out on their own had little to no formal resources regarding opening up a practice. In fact, when I was considering where I would locate my first practice, I obtained a map of the city from the AAA and used those gold stars we all got for being good in kindergarten class to place on the map when I perused the phone book (remember the phone book?) identifying where current practices are located. How did I unscientifically pick my eventual location? I stood back from the map and saw where no stars were located. I never considered the reason why there were no practices in the area where I set up shop. In short, people would likely not make that mistake because nowadays, those brave and determined individuals who yearn to open their own practice have so much information at their fingertips. For example, Google the phrase “open my own practice” and one will see 19,100,000 hits. NINETEEN MILLION! Books have been written on the topic. Blogs are in cyberspace on the process. Links and tips abound! The question is, what steps does one take in formulating the initial idea of starting ones own practice to bringing the idea to fruition and achieving success.
So, let’s say a therapist thinks it all through, considers his personal goals and objectives, and makes a conscious decision to make the move from being employed by another entity to being self-employed. Now what? Before you even open your doors, you need a plan. In the business world, that special plan is called a “business plan.” The business plan is a formal, step-by-step exercise that forces one to put down on paper exactly what he/she will do with all the aspects of the business down to the minutest detail. The template can be downloaded from many websites including the US Government’s small business association site. Who is on your management team? Who is on your advisory team? Who are your competitors? Where is your financing to open the business coming from? Where will you locate and why? Will you have a niche practice to edge out any potential competitor? How will you promote (advertise) your business? The plan is your map and compass to set sail and travel the seas of a successful practice.
The two hats you will wear are, firstly, the treating therapist hat and secondly, the businessman/woman hat. Treating the patients is a cinch – we learned that in school, we have taken continuing education courses to perfect our skills, and we are comfortable in that skin. It’s who we are. But, more importantly, as a business owner, we have to become familiar with business jargon, expertise, and practice and that will bring in the money so as to realize a profit and be a successful private practitioner.
Probably the most important concept that even experienced business owners sometimes overlook is that you must know how much it costs YOU to do business. The therapist must know the real expense to treat an average patient who walks in your door. Calculating your cost per visit not only helps you plan and budget but it also gives you a yardstick with which to measure what insurance contracts you will pursue and accept and which ones you will turn down for low reimbursement.
Lastly, in order to survive and prosper, you must have a plan for how you will market your business. The definition of marketing is simply to bring the seller of a product or service to the buyer of the product or service. Billboard advertising may work for some and personal appearances at a church bull roast shaking hands with the “right” people may work for others. Probably the most important aspect of “selling” your business is to recognize that both your staff and the patients you are privileged to treat are your most important commodities. You must treat both of these groups like the gold that they are to you. Develop a positive and caring rapport with them and cultivate their trust.
We have much more to talk about including particulars related to other resources you have available to open a practice; hiring, staffing, and managing people, all human resource (HR) skills; incorporating your entity; tax issues related to opening a business; lease and contract negotiations; mastering the all-important CPT code game; furnishing the clinic (must have equipment, will plan to have equipment, and “wish I could” have equipment); employee manuals; and many more topics.
Ready to get started?
Dr. Esterson is the author of a well-received book written in 2003, entitled Starting & Managing Your Own Physical Therapy Practice: A Guide for the Rookie Entrepreneur, a book he wished he had when he first thought about opening and then planning his business. The book is available through Amazon.com. The book is written in the “For Dummies” format and is an easy and informative read, loaded with practical information. The second edition focusing on marketing your physical therapy practice, is currently in process.