I have a serious question for you: How profitable is your physical therapy practice?
Before recent challenges, was your practice thriving financially?
The dilemma faced by many practice owners persists—you’re the first one in and the last one paid. Countless stories circulate about owners earning less than their clinicians. I can relate—I was the second-highest paid person in my office, working 60+ hours a week, earning less than a therapist two years out of school (are you kidding me!).
In the face of ever-present challenges, profitability remains a pressing concern. As you adapt to evolving industry guidelines, experiment with new care delivery models, decide on staffing, and market for new patients, maintaining profitability is paramount. After all, what’s the point if your business isn’t profitable?
As Jordan Belfort once said, “There’s no nobility in poverty”.
Without a profitable practice that aligns with your financial goals, you might find yourself stuck in survival mode—constantly working to stay afloat and missing the financial stability needed for your family. Moreover, the opportunity to step away from patient care, assume a CEO role, pursue passions, and control your schedule might slip away.
The foundational principles of practice profitability are crucial as owners build and reshape their businesses to adapt to the ever-changing landscape of healthcare. True profitability is achievable for every practice owner who incorporates these principles into their action plan:
Trying to do everything yourself harms profitability (and pisses off your staff). While fiscal responsibility is crucial, overly cautious owners often miss significant revenue opportunities by saving pennies instead of investing in strategies that transform the bottom line.
Whether it’s handling your own books, marketing without a plan, or making critical decisions without guidance, overworking yourself while underutilizing your team hampers performance and independence.
Efficiency Equals High Profits
High profits stem from good systems. A practice lacking well-organized systems is like sailing a leaky boat—you may not sink, but you’ll work harder for the same or less money. Private practices lose over $100,000 in profits due to inefficiencies. Imagine what an additional $100,000 could do for your practice.
Identify where you might be leaking money:
- Cancellations: A 5% reduction in your cancellation rate can add $25,000 annually.
- Properly billed charges: A half-code reduction in billing can decrease your bottom line by more than $60,000 a year.
- Collect payments upfront to prevent thousands of dollars from walking out the door.
Keep track of data for standards, performance, budgeting, planning, progress, and areas for improvement.
Riches Lie in Niches
Marketing can be costly, especially without a defined audience. Don’t panic and become a generalist practitioner. People seek specialists for their problems. Clearly identify your ideal patient, develop a marketing plan targeting them, and attract committed and motivated patients for a rock-solid, profitable practice.
The path to a truly profitable physical therapy practice involves a strategic blend of delegation, efficient systems, and targeted marketing. As you implement these foundational principles, envision your practice not just as a means of survival but as a thriving entity that allows you to lead, innovate, and enjoy the financial stability you’ve worked hard to achieve.
By embracing these key strategies, you’re not only securing the success of your practice today but also laying the groundwork for a resilient and prosperous future. So, empower your team, optimize your systems, and market with precision—transforming your practice from a leaky vessel to a well-charted course towards sustained profitability.
Are you ready for a coach? Join the hundreds of physical therapy owners who are building the practice of their dreams with the support, guidance and direction of a Practice Freedom U Coach. Take the first step towards creating a business that sets you free by scheduling a Discovery Call HERE