Building a Cash Practice

[DaveMillerDPT]

Updates on the process of starting my own cash practice.

I was asked to offer up what I know about starting a cash practice. For any interested, I invite you to ask any specific questions you might have. I will answer them as the come in. This may be the best way for me to tackle the subject as it is extremely broad to just write a thread on the process. I'll provide major updates as they occur as well.

For context, I began the process 5 months ago. I am working full time at an outpatient clinic until I can transition to my own practice full time. My employer is aware of my desires to start my own practice. This had led to some interesting opportunities at my current job. I am currently in the process of learning marketing strategies, location selection and research for completing all legal documentation requirements, licenses and the like, as well as a whole host of smaller tasks (working on daily routines, time management, productivity, etc... It's hard to work full time and work on this on the side).

I've honestly never been more excited about my career in PT until I began this project. I have many thoughts on why this is as well. So again, I am happy to discuss anything anyone would like to know. I am also open to suggestions from others on strategies or ideas about how to effectively open a private practice.

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[jblil]

Two questions off the top of my head:
- Do you have good sources for referals?
- What is the competition like, in the area? Chiros, Personal trainers, etc?

FYI I've run a side business (business consulting - I have a MBA) for the last 10 years or so. If you want to, post your questions on here and I will respond. This may help others.

 

[twotired]

What are the start up costs of building your practice? Are there special considerations to take as a cash-based practice?

Will you be working on your own?

 

[DaveMillerDPT]

Two questions off the top of my head:
- Do you have good sources for referals?
- What is the competition like, in the area? Chiros, Personal trainers, etc?

FYI I've run a side business (business consulting - I have a MBA) for the last 10 years or so. If you want to, post your questions on here and I will respond. This may help others.

1. My referral source is planned as direct online marketing strategy. I am using strategies taught by other influencers in the cash based practice models (Paul Gough, Jarod Carter, Greg Todd). I do not intend to market to physicians directly. More details available as interested.

2. I live currently in Brooklyn NY, so... competition is wide. However so are the opportunitities. I have more been considering who else is doing cash practice here. What does it look like? What are they doing. Short answer, it's family limited (relatively speaking) in Brooklyn. Much wider practice in Manhattan. Some clinic and home based practices on small scales.

I'll keep you in mind for any questions I might have from your perspective. Thank you.

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[DaveMillerDPT]

What are the start up costs of building your practice? Are there special considerations to take as a cash-based practice?

Will you be working on your own?

Startup costs: This is fairly broad but I have a goal to keep costs well under $5k. I am accomplishing this through seeking space rented from established businesses in the area paying a per use fee (private fitness trainer gym is my current target in my neighborhood). Equipment costs are kept low as a result. Other costs include marketing, licensing, other regulatory fees, legal consulting for PLLC and legal documents.

I will be working on my own mostly. My wife is a spectacular people person and has volunteered to be my secretary until the business grows to hire one.

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[kschaub]

1. How many years have you been a PT?
2. How long in your opinion should you work in one specific area to develop your clientele base?
3. How long should you be a PT before starting your own practice? Is it possible to start straight out of school?

 

[DaveMillerDPT]

1. How many years have you been a PT?
2. How long in your opinion should you work in one specific area to develop your clientele base?
3. How long should you be a PT before starting your own practice? Is it possible to start straight out of school?

Good questions. I've thought about the ladder 2 a lot since starting out in PT.

1. I graduated in May 2013

2. From what I understand of the question, I don't believe I need to really work any length of time to acquire a clientele before starting my own practice. For speciality, I would ask myself the question, "If I want to be a specialist in running, or Parkinson's, I need to know the biggest challenges facing that demographic and if I can solve those problems." How long that takes may be a month to years. With that in mind I say don't wait until everything is perfect. If you're passionate, then do it and learn along the way. It doesn't take a massive financial investment to start a side business most times.

I've heard recommendations of PTs building a following first where they work and then taking that with them. For me, it isn't feasible. I work in Long Island, 30 miles from where I intend to open my practice. In New York terms I may as well work in another state. So, when I transition I will likely take very few clients with me.

3. I used to think I needed to be a therapist for years before starting my own practice. I honestly believe any PT with average skill can start a practice straight out of school. It requires a level of competence and self efficacy to venture into it though. That being said, I strongly encourage anyone who wants to attempt that feat to prepare extensively while in school. I do not believe the training in PT school is at all sufficient to provide a new grad the tools necessary to succeed. But it is possible. Had I known this 6 years ago. I would have started 6 years ago for sure. It takes added knowledge not available in PT school to run a business. It does give us the necessary clinical skills though. (There are many who may disagree here, and I welcome any discussion on it)

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[jblil]

Startup costs: This is fairly broad but I have a goal to keep costs well under $5k.

That's excellent, if you can keep costs that low.
- If you have to sign a lease, watch out for "personal guarantee" clauses;
- Have you projected income/expenses for 6 or 12 months out, using a worst-case scenario?
- Think of an exit strategy now, whether your business is successful or not.

 

[FoamCup]

Great thread. Tons of knowledge. Keep it coming

"I do not intend to market to physicians directly. More details available as interested."

Interested in details.

 

[FoamCup]

Startup costs: This is fairly broad but I have a goal to keep costs well under $5k. I am accomplishing this through seeking space rented from established businesses in the area paying a per use fee (private fitness trainer gym is my current target in my neighborhood). Equipment costs are kept low as a result.

dude more details about this would be greatly appreciated. How does one go on about approaching people? how does this work?

 

[FoamCup]

The biggest hurdle would be MARKETING cash based and developing a clientele.

 

[DaveMillerDPT]

That's excellent, if you can keep costs that low.
- If you have to sign a lease, watch out for "personal guarantee" clauses;
- Have you projected income/expenses for 6 or 12 months out, using a worst-case scenario?
- Think of an exit strategy now, whether your business is successful or not.

I have not completed full projections. Thank you for the reminder. I will add it to the to-do list. But that is part of my business plan that I'll be writing up to completion in the next month.

I have considered exit strategies and worst case scenarios as well. It is part of the reason I'm taking a more gradual approach to the start.

I'd be interested knowing more in the "personal guarantee" clause.

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[jblil]

I'd be interested knowing more in the "personal guarantee" clause.

As its name indicates, a personal guarantee makes you personally liable. If your 5-year lease has that clause, you are required to pay the lease for the full 5 years, even if your business folds after 3 years. This clause was fairly common during the 2008 recession as landlords were afraid they would not be able to find new tenants if the space became suddenly vacant. Now that the economy has recovered, they may not be so anal.

As a tenant, you'd want to avoid a PG as much as possible. If the landlord insists on one, try to see if he'd accept a modified version: if your business closes before the end of the lease, you'll pay the next 4 (or 6 or 12) months' rent. At least you won't be on the hook for the full term of the lease.

 

[jblil]

Also make sure you have good malpractice insurance and a lawyer who can respond quickly to your questions/needs; you may need to pay him/her a retainer. I have family members in the healthcare business, and some of their patients have threatened them with lawsuits for the most ridiculous reasons. While the plaintiffs would have no chance of winning if the suit made it to court, it still takes time to write letters back and forth. Let a lawyer deal with that hassle since you probably won't have time.

 

[bap03]

Do you have a niche or specialized service that will make you the "go-to" for certain clients?

 

[DaveMillerDPT]

That's excellent, if you can keep costs that low.
- If you have to sign a lease, watch out for "personal guarantee" clauses;
- Have you projected income/expenses for 6 or 12 months out, using a worst-case scenario?
- Think of an exit strategy now, whether your business is successful or not.

Great thread. Tons of knowledge. Keep it coming

"I do not intend to market to physicians directly. More details available as interested."

Interested in details.

The marketing strategy follows that of what Paul Gough teaches, I have also been following a handful of other influencers in the digital and direct marketing arenas. The more I learn of general marketing, the more I learn how to apply it to my own practice.

The gist is this:

I need to have a target market, specifically what the marketing world calls its "avatar." I set out to find the exact person who would be my best and ideal patient. From there we work backward. What does this person want most out of life, how do they make decisions, what are their values, etc...? We then base our marketing on finding that person each and every time.

The next step is the channels. There are over a dozen possible channels that we can use but I won't go into those here. Those I intend to use first are online paid traffic, website (of course), and local paid advertising in newspapers and community forums. These channels I will tweak over time. Once the channel is identified, I must set up a way to track the success of the channel. To do this, I am generally going to offer something for free. To start, I am writing "how to" guides for pain (back pain, knee pain, ankle pain, etc...). Another will be free "discovery sessions" where I spend time teaching the public on what PT can do for their pain or ailment. Each of these will be given away as part of an ad on Facebook or on my site in exchange for the email and phone number of the person requesting. Doing this sounds simple but I have invested hours into studying market copywriting and advertising writing so as not to waste too much money getting it right. Once I've gotten people to accept the offer for the guide, I call and email them in order to establish a relationship, nurturing them into becoming a customer over the next few days to months, however long it takes. That is the very reader's digest version.

Apart from this I will keep in contact with past customers. Following up on their progress at set intervals, making sure they are doing well and feeling happy, offering "tune-up" visits as needed for recurring issues.

I will have a referral system to place in here as well and a way to attract some reviews online also.

There is a large 7 step process that Paul teaches that I intend to implement. The purpose of this strategy is to automate as much of it as possible. As I get the system down, I will document and reuse the market copy and emails with an automated marketing system, train a receptionist on how to handle the calls and work toward perfecting the system.

These questions have been great guys. Keep them coming. It is useful for me to explain and write this out for other future projects I have in mind and I hope it adds some value to the readers.

 

[DaveMillerDPT]

dude more details about this would be greatly appreciated. How does one go on about approaching people? how does this work?

The story on this on this is thanks to a wife who is far more confident and extroverted than I am. She noticed this guy sitting in a small office/gym space right around the corner from us. (I'm originally from Wyoming guys, NYC is crazy big, so I didn't see it). Anyway, she walked in one day, knowing I was looking for a space like his. It's very nice inside (for our neighborhood, sleek and furnished well). She simply walked in and asked what he did, friended him on facebook and instagram and then a couple weeks later simply asked him if he was interested in renting the space.

He isn't there all the time. So something tells me he has another job or side gig somewhere. So my hope is to utilize the space in the AM before I go to my evening shifts at my current job a few days a week. But that hasn't been settled. I have yet to meet with him. It was mentioned earlier that AT's might be considered competition. In my opinion we can work together well. I'm not a fitness trainer but I can certainly help someone who is training to have improved movement with less pain.

Side note: This trainer is also offering 1 time sessions for $180/session. $100/10 sessions. So, his pricing helped me to validate what I'm doing. If he can charge that much without a DPT degree, then I can certainly and confidently charge cash rates without wide spread resistance.

 

[jblil]

This trainer is also offering 1 time sessions for $180/session. $100/10 sessions.

You live in NYC, an affluent area that can support that kind of pricing. And the health literacy of folks there is probably a bit better than average. I have always maintained that a cash-only PT practice needs 3 things: an affluent area, a relatively well-educated population, and not too much competition from chiros, other PTs or personal trainers. Looks like you have at least 2 of the 3. Keep us posted.

 

[DaveMillerDPT]

Do you have a niche or specialized service that will make you the "go-to" for certain clients?

I have considered this topic extensively the last several months. The short of it is this. I don't believe that most potential customers are going to care whether I'm manual therapy certified or whether I have an alterg treadmill system. Most people do not understand exactly what a physical therapist even does. Trying to say you're the best PT because you have this cool equipment or certificate only complicates the decision for the customer. Most have a vague idea at best what PTs do and they likely care little how many letters are after my name. The real hurdle is related to identifying and attracting my ideal customer.

I admittedly am still working this out. I am more concerned about defining an avatar. I've had many potentials in the last few months in my current job. They tend to be older adults, mid 40s to 50s who are working to stay active, in their job, avoiding surgery and who are motivated to make lifestyle changes. They have families, value health and are moderately well educated. I also need to define this person more but I connect well with this population and I believe I can more easily persuade this type of individual to choose my services over someone else's. I can do this with making all of my marketing targeted to this exact individual.

I also admit however that I've had debates with myself about this. Do I need to pick a sport interest? Do I need to get certified in some special technique? What would give me an edge in finding customers? So far, with everything I'm learning, the answer appears be marketing. I need to convince everyone I work with that I can solve their problem. I need to develop trust and authority through marketing and customer engagement efforts. Taking more CEU Courses won't ever do this, ever... it may make me better at treating but it won't attract more patients. Therefore, I am focusing most of time in developing marketing.

Hopefully this makes sense. Thank you for the question.

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