Starting a physical therapy private practice isn't the right career path for everyone. In fact, it's not even the right career choice for most. There's more risk, more stress, more responsibility, and less free time than if you simply worked for someone else. Not only will you have to focus on providing great patient care, but also you'll have to hone your business skills—and they don't teach you much about the latter in PT school. But, as physical therapist, clinic owner, and author Dr. Sam Esterson writes in this article: "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.'"

So, what's it going to be? Are you forward-thinking enough? Do you possess enough motivation and internal drive? How's your blood pressure? If you're still interested in starting your own private practice therapy clinic—if you think you've got what it takes—keep reading to learn more about deciding on a management strategy, finding the right location, purchasing equipment, selecting software, and choosing a specialty:

What Kind of Practice Do I Want?

Leadership: Solo or Partners

One of the first things you should consider when thinking about opening your own practice is whether you plan to run it on your own or with a partner. According to the American Physical Therapy Association (APTA), there are many benefits to bringing in another party. In fact, they go so far as to say that "partnership is often what makes ownerships possible." Partners can often provide what you're missing—whether that be money, experience, relationships, or business acumen. In other words, bringing in a partner may fill a critical gap and in turn allow you to achieve even greater success than what you could accomplish on your own. Plus, you'll have someone with whom to share the risk and the reward, because we hear it can be pretty lonely at the top. Even science backs up the importance of having a partner: the APTA cites research from the Center for the Study of Entrepreneurship at Marquette University that found that 94% of high growth companies were founded by partners (out of a total sample of 2,000), whereas only 6% were founded by individual owners.

So the old saying is true: Two heads are better than one. Well, most of the time anyway. There are some definite risks associated with forming a partnership, like loss of control (as the APTA points out), differences of opinion, and the dangers of mixing business and pleasure (if you go into business with a friend or family member, that is). That's why entering into a partnership is not something to take lightly—especially considering that getting out of a partnership is always much harder than getting into one. In fact, the APTA strongly recommends seeking legal counsel prior to entering into any business arrangement.

If going solo still feels like the right business decision for your new practice, you'll be happy to know there are some benefits to go along with your increased risk, like freedom to make your own decisions and receiving all the profits. But then again, you also deal with all the debt and, according the APTA, all of the "administrative burden."

If neither going solo nor partnering up sounds quite right for you, you could always join a group practice and benefit from the experience of other savvy business/therapy professionals. Plus, in this case, you won't have to invest in space or equipment and you'll get all the perks of an already established—and hopefully, successful—practice.

Looking for some more guidance as to how to choose? The APTA suggests asking yourself the following questions (and we suggest being really honest with yourself about your answers):

  • Do you prefer working with a team or on your own?
  • Do you enjoy having people around to interact with regularly?
  • Are your skills well-balanced? In other words, in addition to being an excellent clinician, are you also good at building relationships, communicating clearly and consistently, handling complicated finances, launching successful marketing campaigns, and implementing and maintaining technology? If not, could you hire to fill the gaps?
  • Do you focus on the big picture or the day-to-day details? If your answer isn't "both," who's going to focus on the other one?
  • Do you know exactly what you want your practice to be like? Will it be difficult for you if things don't turn out just as you pictured?
  • Are you confident enough to pull this off on your own?

If you're already an APTA member, check out this article on structuring your business for tax purposes and to mitigate liability. If you're not yet a member, consider joining. Professional associations provide excellent educational resources and networking opportunities for new entrepreneurs.

Compensation: Cash-Based or Insurance-Based

Traditionally, physical therapists—like other healthcare providers—enter into contracts with most major insurance companies to provide services to beneficiaries at a specific, agreed-upon reimbursement rate. In this model, the financial burden for most services falls to the insurer (aside from a nominal co-pay). However, as reimbursement rates decrease and the cost of simply staying in business increases, more and more PT practices are opting to go "out of network" and into a cash-based physical therapy practice.

As this Advantage Medical article points out, "Add the hassles and paperwork associated with insurance and Medicare reimbursements, and it's no wonder that the idea of running a cash-based physical therapy clinic sounds very appealing." But it's not all sunshine and rainbows. In this article, physical therapist and cash-based clinic owner Ann Wendel writes that her documentation and billing practices are not that different from an in-network provider: "The advantage of being cash-based is that I enter into a contract with the patient to provide physical therapy services in a manner that I have determined will help them reach their goals most efficiently. The thorn on the rose is that my documentation and billing practices must ultimately lead to the patient getting reimbursed from their insurance or they won't be able to continue treatment with me."

Even with proper documentation and billing practices, you may find that not all patients are willing, able, or—as is the case for Medicare patients—legally allowed to put up the money for physical therapy services and then wait for reimbursement—especially if there's a provider who accepts their insurance down the road. That's why the APTA recommends seriously considering whether your services are "sufficient to convince patients to choose to come to your practice despite the out-of-pocket costs" by asking yourself these questions:

  • Do your patients trust and value the care you provide?
  • Are many of your patient referrals from family, friends, or trusted healthcare providers?
  • Do your location, hours of operation, and availability meet your patients' needs?
  • Do you provide a level of clinical expertise and/or service that your patients cannot get elsewhere?

According to the APTA, you should also consider your community demographics and how other cash-based businesses and healthcare services—such as massage therapy, chiropractic, acupuncture, and health clubs—are performing. This can be a great indicator for your own success and can help you identify gaps in services that you can fill. The APTA lists teen sports rehab, chronic disease management, complex orthopedic condition management, hand therapy and splinting, women's health, and cancer rehabilitation and management as possibilities. (See "Choosing Your Speciality" below for more on this topic.)

If you're ready to transition out of network, it's time to start thinking about setting fees, collecting payment, and discontinuing insurance contracts. This APTA article is a great place to start. If you're not ready to go all the way out of network, you could consider providing cash-based supplemental services—like medically-oriented gym memberships, pilates or yoga classes, nutritional supplements, or durable exercise supplies—to generate additional income. Think of this as an opportunity to stick your toe in the cash-based services waters.

How Should I Determine My Location?

Sure, that open office space you drive by every evening might be calling your name, but before you go putting down an offer, you better do your homework. After all, your location can make or break your success, so it's time to start scouting out the community by answering the following questions:

  • What direct access services can you legally provide in your state? (Find out in our state-by-state lists here: Alabama-Hawaii, Idaho-Mississippi, Missouri-Pennsylvania, Rhode Island-Wyoming.)
  • What are the tax implications and fees for small businesses in your state, city, and county?
  • How many people live or work in the community? Realistically, how many of them will seek out your care?
  • How many referral providers work in the area? How many of them routinely prescribe physical therapy?
  • How many other physical therapy providers are there in the community? Is the area already saturated or can you identify a gap in services that you can fill?
  • How do you become a preferred provider for payers in your area? Will it be difficult?
  • 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?
  • Is your building easily accessible by foot, car, or public transportation? Will signage be visible from nearby streets?

Not sure where to begin? You can start by reviewing the community demographics in the US census data or on your city's website.

Once you've conducted your market research and you have a feel for the area, 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're looking for someone to advocate for you, try retaining the services of a tenant broker. He or she—along with a real estate attorney—will help you negotiate your contract so you get what you need in terms of lease length and landlord renovations.

Per the APTA, here are a few other things to consider when looking for the right spot for your practice and defining the terms of your contract:

  • If your patient population is mostly baby boomers, consider how accessible the building and restrooms are as well as how far the parking lot is from your office.
  • If you're the first PT moving into your building, ask your landlord if he or she would be willing to include an exclusive use clause in your lease so no competitors will call your address home.
  • If you plan to offer after-hours services—like gym memberships—be sure to tell your landlord exactly what you're thinking so you can be sure it's acceptable within the terms of your lease.

One more thing to consider: How much space do you really need? In this article, PT and clinic 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?" In his opinion, growing too big for your office space is a much better problem than throwing money away on office space you're not using. Not quite ready to nail down your own space? Sparacio offers up the following advice: "Subleasing space from other health professionals or health clubs can also be an affordable alternative."

Which Specialty Should I Choose?

If you haven't already considered your new practice's niche, now's the time to do so. What services can you provide that will set you apart from your potential competitors? In a whitepaper entitled "Build Your Practice by Finding Your Physical Therapy Niche," Jeff Worrell has a few suggestions for physical therapists looking to identify a specialty—be it sports, pediatric, or post-surgical rehabilitation: "Take some time to jot down your experiences on a piece of as specific as possible. Look for similarities and highlight the experiences that are similar." He also recommends that you ask yourself the following questions:

  • What type of physical therapy work do you enjoy doing?
  • What is the market potential for your specific area of interest?
  • What type of patients do you enjoy working with?
  • What experience do you have that can help you achieve success in your chosen niche?
  • Are there other physical therapists who have built a successful practice in this niche?

Sometimes, therapists find their niche in the most unexpected places. For example, while my husband, WebPT Co-Founder Brad Jannenga, was getting his certification in archery instruction, he and I spent a lot of time in sporting good stores, where I met many wilderness athletes—all of whom were suffering from a shoulder injury or some other form of musculoskeletal trauma. I began treating a few of these athletes, and as my niche clientele grew, I saw an immediate opportunity to expand my business by specializing in the treatment of wilderness athletes.

For more information on marketing your niche, check out this article.

What Do I Need to Know About Purchasing Equipment?

Once you know who and where you want to treat, it’s time to consider how. What kind of equipment will you need to provide exceptional care for your patients? Before you become overwhelmed by the mere thought of such a large purchase, consider this advice from PT and clinic owner Jack Sparacio's post on opening an outpatient private practice for less than $8,000: "Buying equipment for your office does not need to break the bank. And with the Internet, you can quickly compare prices to save significant amounts of money." Looking for an example? Jack says you can save thousands by spending $200 on separate portable ultrasound and electrical stimulation units (instead of $3,500 on a high-end combination machine) or $500 on an economical wood table (with an adjustable backrest) and step stool (instead of $3,000 for an automatic high-low treatment table). But Sparacio isn't suggesting that you sacrifice quality for a lower price; just be practical, resourceful, and "creatively efficient." Sometimes, that's even better for the patient. For example, when you're designing exercises for a patient, consider using equipment—like ballet bars, sport cords, and resistance bands—that patients can mimic at home. As Sparacio points out, "Most patients don't care about fancy bells and whistles. They just want to get better." Plus, not having all those large exercise machines will enable you to use your space more efficiently." And that's a win for everyone.

Physical therapist and clinic owner Ian Kornbluth has his own recommendations for which space-saving devices you should implement to facilitate better patient care and improved well being. His list includes:

  • Redcord: According to Kornbluth, therapists can hang this suspension-based therapy system—which leverages a patient's body weight as resistance and "activates" specific muscles through "high levels of neuromuscular stimulation"—directly over a therapy table, so it won't take up any extra floor space.
  • Pilates machines: Therapists who offer Pilates provide their patients with a "holistic approach" to treatment, "improving strength, flexibility, coordination, and balance." Plus, Pilates classes can be a great source of additional revenue.
  • Cable column: Kornbluth recommends a "double-pulley" version of this workout system, on which you can hang a "home suspension device" and save even more space.

Regardless of how you decide to furnish your space, be sure to use your connections to get the very best prices. If you're a WebPT Member, those connections can earn you up to 35% off clinical supplies in the WebPT Marketplace.

What's the Right Software for Me?

In 2014, all physicians were required to adopt EMR, and there's a really good reason for that: compared to paper charts, EMRs are better equipped to provide patients, providers, and payers with legible, accessible, and defensible documentation. With an EMR, your documentation will clearly communicate your and your patients' experiences—and your days of sorting through chicken-scratch notes will be long over. Here are just a few more benefits your new clinic will get with the right EMR:

Compliance Support

Every reporting regulation—PQRS, functional limitation reporting, the 8-minute rule, and the therapy cap—has its own challenging set of requirements. But the right EMR will provide the support you need to be compliant with all of them. Simply follow the built-in prompts and alerts, and you'll fulfill all the necessary requirements for every patient, every time. Plus, your EMR can help you find and select the most accurate ICD-10 codes to describe patient diagnoses, thus helping you justify the medical necessity of—and get paid for—the services you provide.

Safety and Security

Choose a true web-based (not web-enabled) EMR, and your patient data will be safe and secure—forever. You'll have all the benefits of the world's leading data centers—like protection from natural disasters, digital video surveillance, biometric screening, and round-the-clock guards—and none of the cost or responsibility.

Free Marketing

Referrals make up a large part of new business for most physical therapists. With an EMR, you can maximize those referrals by tracking how many you receive and from whom. It's a great way to identify those in your network who need a little more attention. With an EMR, you can also display your clinic's logo on all of your digital documents, so every note you send reminds prospective referrers of your clinic. (Free marketing, anyone?)

A Paperless Front Office

With an EMR, you'll have total visibility into the scheduling operations of your entire clinic—even if you have multiple locations. Plus, the built-in scheduling tool automatically links your patient records with your clinic's calendar, so you can review notes with the click of a mouse and send automatic appointment reminders via the patient's preferred method. The scheduling tool also enables you to:

  • track missed appointments;
  • easily book or reschedule appointments;
  • manage therapists' schedules;
  • view the schedules of your other clinics (if applicable); and
  • color-code patient appointments based on insurance type.

Still not sure why you should invest in the right EMR for your outpatient physical therapy clinic? Check out this article or this one.

Start your new practice right with the industry’s best physical therapy software.

How Do I Write a Business Plan?

Once you've got at least a rough idea of how you plan to run your physical therapy practice, it's time to take it one step further and prepare your business plan.

What is a business plan?

A business plan is a formal document that contains every detail about your business—including market assumptions; operations, sales, financing, and hiring plans; and your values and goals. This document will serve as the foundation for your business as well as the driver. It will act as a baseline for monitoring your growth.

Who should write a business plan?

Anyone who plans to run a business should write a business plan, especially if you're working with other people—investors, partners, or employees. According to this article on, "...anybody beginning or extending a venture that will consume significant resources [money, energy, or time]...and that is expected to return a profit, should take the time to draft some kind of plan."

Where to start?

According to this article, you should start with a plan for the plan: "One of the most important reasons to plan your plan is that you may be held accountable for the projections and proposals it contains. [This is] especially true if you use your plan to raise money to finance your company." Here are some questions (also courtesy of to get you started when it comes to thinking about your business goals and objectives:

  1. How determined am I to see this succeed?
  2. Am I willing to invest my own money and work long hours for no pay, sacrificing personal time and lifestyle, maybe for years?
  3. What's going to happen to me if this venture doesn't work out?
  4. If it does succeed, how many employees will this company eventually have?
  5. What will be its annual revenue in a year? Five years?
  6. What will be its market share in that time frame?
  7. Will it be a niche marketer, or will it sell a broad spectrum of goods and services?
  8. What are my plans for geographic expansion? Local? National? Global?
  9. Am I going to be a hands-on manager, or will I delegate a large proportion of tasks to others?
  10. If I delegate, what sorts of tasks will I share? Sales? Technical? Others?
  11. Is it going to remain independent and privately owned, or will it eventually be acquired or go public?
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After you've fully answered these questions, you've probably got a pretty good idea of the direction you wish to take your clinic. Now it's time to figure out how you're going to make your goals a reality. Drum roll, please. It's time determine your marketing plan. Whether you're hoping to find new patients or hire all-star talent, how you present yourself and your practice to the local community—and the physical therapy community as a whole—is quite important. In fact, Chief Executive Officer of EMSI Public Relations Marsha Friedman strongly recommends that you include a marketing budget—taking into consideration both time and money—in your business plan from the get-go.

Now that you've got your plan for the plan complete—you've considered your staffing needs, nailed down your financing options, and identified your business goals as well as how you plan to reach them—it's time to start writing. For more information on how to finish a business plan, check out this WebPT blog post.

Curious about how others got their start in private practice PT? Check out this article or this one.

Disclaimer: Please note that this is general information only and we do not intend for you to use any of it as legal advice or guidance. Nor do we intend for you to use it in lieu of seeking appropriate legal counsel.

Heidi Jannenga

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