If you’ve ever planned a vacation, then you know how important it is to plot your trip ahead of time. The planning process typically starts months in advance as you daydream of warm, sandy beaches or spectacular city nightlife. Once you have a destination in mind, you have to determine when is the best time for you to go. (Is there an event you’d like to attend? Will the weather be cooperative? Will you have enough time to save up spending money?) From there, you need to decide how you’ll get from point A to point B (e.g., by plane, train, or car). Finally, you’ll schedule out a trip itinerary and decide how you’ll spend your time away. And if everything goes to plan, you’ll be on a beach sipping margaritas or exploring the streets of an unfamiliar city in no time.
So, what do jet-setting and adventuring have in common with creating a physical therapy business plan? Even if you’re not the type to adhere to a strict travel schedule, it’s important to have some kind of plan in place before you take off for a new destination. And whether or not you realize it, the process of mapping out an adventure basically boils down to the same process for creating a strategic business plan in a practice setting.
What is strategic planning?
In a nutshell, strategic planning is a method that both large- and small-scale organizations use to identify—and hold themselves accountable to—an optimal pathway toward future goals. During the planning process, the practice owner—or other decision-maker—makes precise decisions based on:
- a chosen planning strategy,
- the clinic’s mission and values, and
- environmental factors such as payer or industry changes.
Decision-making aside, strategic planning also helps ensure that:
- your practice achieves its current goals;
- your practice will achieve its future goals; and
- you’re cognizant of potential roadblocks.
Your strategic plan is your clinic’s operational playbook.
Practice owners and managers are a lot like expert jugglers: as one hand tosses a ball into the air, the other hand is busy catching another ball that’s coming back down. The more balls a juggler throws into the mix, the more important it is for him or her to have a strategy. And if you’re running a busy practice, you’ve probably got several balls aloft as we speak. But when you have a strategic plan that you revisit regularly, it helps you:
- stay abreast of all ongoing operations,
- know when to phase out strategies as your practice outgrowns them, and
- time the launch of new initiatives that’ll help you achieve your long- and short-term goals.
With that in mind, it’s crucial to have this strategy written out. That way, you—and others for whom this information is pertinent—have something to refer back to at various stages of your company’s life cycle. The basic outline for any strategic plan should look something like this (as adapted from this Forbes article):
- Executive Summary: This is a brief summary of your strategic plan. You’ll complete this last, but it should be the first thing that employees, advisors, and investors read. Also, be sure to write as simply as possible. The easier it is for people to read and envision, the more buy-in and support it will garner.
- Elevator Pitch: This is a brief description of your clinic, including your target patient demographics and specialized treatment modalities.
- Mission Statement: This explains what your practice is trying to achieve. It may not seem important, but having a clear, defined mission will help inform future decisions.
- SWOT Analysis: Simply put, this is an analysis of your clinic’s strengths, weaknesses, opportunities, and threats—hence, the acronym SWOT. (We’ll dive into this more in a bit.)
- Goals: Start by determining your five-year (or long-term) goals. Next, create your one-year goals by identifying what you’ll need to achieve in the next year in order to reach your five-year goals. Then, as the above-cited article states, “Work backwards two more times to determine your goals for the next quarter and the next month.” Remember to revisit your goals every 30 days and update your monthly goals as needed.
- Key Performance Indicators (KPIs): Tracking both financial KPIs and therapist productivity metrics not only helps you not only assess your practice’s financial health, but also establish realistic goals based on your current operations.
There are multiple strategic styles.
While every strategic plan should follow the above outline, not every plan follows the same style. That’s because not every business environment is the same. There are many styles of strategic planning, but some of the more common ones that are relevant to the PT setting include:
- Classical: Used in predictable environments; tends to remain unchanged for years.
- Adaptive: Used in unpredictable environments; tends to employ flexible and experimental approaches.
- Shaping: Used in unpredictable environments that you can influence and change.
- Visionary: Used in predictable environments that you can influence and change.
Not surprisingly, many practices use a classical strategy, which means they develop a strategic plan when the practice is first established and stick with that approach for many years. It’s probably the easiest method, but in an industry like health care—one characterized by so many changes, advances in technology, and opportunities for industry disruption—practices will likely find themselves in need of a more adaptable and creative strategy.
How can practices build the perfect strategy?
Define your practice’s mission.
As I mentioned above, you need to establish and define your practice’s ultimate goal. What motivates and connects you and your team? Obviously, you want to heal people, but try thinking beyond the day-to-day. What sets your practice apart from the other rehab therapy clinics in your locale?
The answers to those questions partially depend on your practice’s core values. These values will help you decide what kind of strategy you should employ as well as set the tone for your future goals and objectives. But, they aren’t necessarily set in stone. As your business grows and develops, be sure to periodically revisit and review your clinic’s values and goals—and revise them when necessary.
Analyze practice operations.
Once you’ve settled on a mission, you’ll need to assess the operational and environmental factors that influence your practice’s day-to-day. Some aspects to consider are:
- team culture,
- financial health,
- local market,
- IT systems, and
- clinic brand.
There are a few different methods for this process, but the most common for rehab therapy practices is the SWOT analysis method I mentioned earlier. The point of performing a SWOT analysis is to help you identify the best opportunities to pursue in order to achieve your practice’s growth goals (i.e., ones that play to your strengths, improve your weaknesses, and protect you from threats). It also helps you determine which strengths to develop in the near-future to remain competitive in an ever-changing market.
Pick a strategy and develop your plan.
Once you have a clear lay of the land, consider the aforementioned strategic planning methods and choose the one the best aligns with your practice’s mission and core values. The method you choose must help you reach your goals on an established timeline. Be sure to think about:
- what strategy covers the most goals;
- where you should focus most of your energy; and
- what you—and other decision-makers—should keep in mind when hiring new staff or making key investments.
Finally, remember that a strategic business plan is a living document—one that you will need to revisit and update every now and then. That’s because, unlike that whirlwind vacation, the business plan party isn’t over once you head home. Your practice’s overall strategy requires regular care and maintenance. Do that, and you’ll navigate the road ahead with ease—no matter where your practice is headed.