“Location, location, location.” It’s the official mantra of real estate agents everywhere. That’s because—as those who work in the property-selling business know all too well—the value gap between two otherwise-identical homes often comes down to the ZIP code. As a physical therapist, the value of the services you provide to a community also depends on where you provide those services. (After all, “value” encompasses everything from the literal cost of your services to your patients’ perceived value of care based on quality, convenience, and even regional attitudes toward physical therapy.) In short, choosing the right location for your physical therapy clinic is absolutely crucial, and there are many factors to consider, from curb appeal to clinic layout. With that, here’s a quick guide to finding the right place to open your PT practice:

The State of Rehab Therapy in 2019 - Regular BannerThe State of Rehab Therapy in 2019 - Small Banner

1. Look into local laws.

First things first: No matter where you set up shop, you’re going to face a host of rules and regulations—some of which may be totally unique to that state or locale. So, before you start looking at actual storefronts, familiarize yourself with the rules—including the provisions of your state practice act as well as what direct access services can you legally provide in your state. Also, you’ll need to get to know the various tax implications and fees for small businesses in your state, city, and county. We advise connecting with an attorney who has vast experience in physical therapy-specific laws before making any permanent decisions.

2. Research payer rules.

Your state, county, and city laws aren’t the only rules you’re beholden to as a healthcare provider. Unless you’re totally cash-based, you’ll need to work with insurance payers. And if you plan on remaining competitive—which you should—you’ll need to make sure the major payers in your area eagerly send patients your way. So, research ways you can become a preferred provider for payers in your area, and make sure it’s not more trouble than it’s worth.

Additionally, reimbursement rates can vary greatly across state lines. What is the typical reimbursement rate for providers in your area? What should you expect to write off as a result of denied reimbursements or failure to collect? These are factors that will help you decide which city or state will offer you the best financial opportunity.

3. Assess demographics.

Of course, even if you find the area that yields the best reimbursement rates, your practice won’t last long without patients to treat. You could rely on referrals alone, but as the industry continues to evolve and consolidate, that’s not a great strategy if you want to stay in business. (Hint: You’ll want to leverage your ability to see direct access patients to the full potential.) So, make sure that, wherever you set up shop, your practice’s offerings will align with the demographics of the surrounding area. For example, if your practice will primarily treat the geriatric population, then it’d be wise to set up in an area with a high senior population. Or, if you plan on running a cash-based practice, you should consider opening in a higher-income area, as these individuals are more likely to pay out-of-pocket for healthcare services.

4. Skip the saturated areas.

Okay, so you’ve narrowed down where you want to operate and who you want to serve, but you may not be the only one with that idea. So, check out the surrounding area and look for other PT practices. Are any of them similar to yours? If so, is the area populated enough to support more than one practice of the same kind? For example, in a metropolitan area, you’ll likely have ample competition unless you offer niche services. In rural areas, there’s typically less competition, but you’ll be serving a more spread-out population—and that could make it difficult for individuals struggling with mobility to access your care. If you do end up in a rural area, make sure you’re taking advantage of telehealth technology and using an interactive home exercise program (HEP) to keep patients engaged throughout the course of care—even when they can’t make the trek to your physical location.

You’ll also want to look for non-PT practices in the vicinity. Is the area saturated with healthcare providers you could tap for referrals? Do those providers frequently refer their patients to PTs? This is especially important if you’re going to rely heavily on provider referrals as a source of new business, because you’ll want to be in a location that’s convenient enough for those referred patients to come see you. It’ll also make it easier for those patients to find you if they know you’re just up the road from their primary care physician.

5. Say “yes” to an address.

Now comes the fun part: once you’ve zeroed in on a geographic location, it’s time to start browsing real estate—either alone or with the help of a leasing agent. As this article points out, though, "Most commercial real estate brokers work for property owners and represent the owners' interests." If you need an advocate, consider reaching out to a tenant broker. He or she—along with a real estate attorney—will help you negotiate your contract and ensure that the terms of your lease meet your needs and are fair.

Also, how much space do you need? Perhaps more importantly—how much can you afford? In this article, physical therapist and practice owner Jack Sparacio suggests asking yourself if you really need "the 3,000 square foot office and [to] pay rent for space you are hoping to grow into? Or can you get your practice up and running in the 800 to 1,000 square foot office for one-third the rent?" According to Sparacio, it’s better to underestimate how much space you’ll need than to overestimate and throw money away on unused space. And if you’re hesitant about committing to a specific space, Sparacio offers the following advice: "Subleasing space from other health professionals or health clubs can also be an affordable alternative."

Additional Considerations

When it comes to the office space itself, there are a few things to think about:

  • Is the space easily accessible by foot, car, or public transportation?
  • Will your signage be visible from the street?
  • If you work with the aging population, are the restrooms easily accessible from the treatment and waiting areas?
  • Would the landlord be willing to include an exclusive use clause in your lease so you don’t have to worry about competitors moving in?
  • If you offer after-hours services—like gym services or fitness classes—will the terms of your lease allow this?

Picking a location is a big step for any new business owner, and PT clinic owners are no exception. Often, having the right location can be the thing that makes potential patients pick your practice over your competitor, so it’s not a decision to take lightly. How did you choose your current practice location? Have any special tips for finding a great space? Share your thoughts in the comment section below!

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