How to Start a Private Physical Therapy Practice

Starting your own private physical therapy practice may be one of the biggest decisions of your life. It can be both rewarding and challenging. This guide will help you wrap your head around the idea and key considerations that you should be thinking about.

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Thinking about going out on your own?

Starting your own private physical therapy practice may be one of the biggest decisions of your life. It can be both rewarding and challenging. This guide will help you wrap your head around the idea and key considerations that you should be thinking about.

How to Decide if Starting a Practice Makes Sense

At some point in their careers many physical therapists consider whether they might wish to own their own practice. There are many attractive reasons for going down this path. For most it is very enticing to be able to make your own decisions. For others it may be about being able to see the type of patient population or client you most enjoy treating. For others still it may about the potential to earn much more income than if you work for someone else.

Regardless of your reasons there are many pieces to starting a practice that you should consider. This blog is not dissuade you from embarking on this path. It’s just better not to be surprised and find it’s not what you envisioned.

One of the first questions you should ask yourself is: Am I an entrepreneur? Almost all who start a business are at least somewhat entrepreneurial in nature.

Another question you should ask is how comfortable are you at taking financial risks? More than likely you will need to borrow money which means you are legally obligated to pay it back. If it’s scary to be carrying debt with no certainty your income will be enough to make the payments then this may not be your best path.

We will not be able to go into all these areas in detail. For those of you potentially looking at a venture into a private practice here are some important considerations.

Business Plan

The first thing you should do when thinking about starting a practice is develop a business plan. The business plan serves multiple purpose.  It can be viewed as a roadmap or guide towards achieving success. Initially it guides you on how to develop and operate the business in its initial startup phase. It also serves as a valuable exercise in determining whether the idea for a new practice could really work.

Many items described below are included in the plan. Others will include the Vision and Mission of the practice, the business structure, (solo practice, partnership, LLC), the target market, operations, staffing, financial projections and more.

What’s crucial about the business plan is you need to be brutally honest with yourself as you do your analysis. If you are overly rosy then when reality strikes it may be very painful.

Practice model: Niche vs general

One of the first concepts you need to decide is what type of practice model will you use? Will it be a general practice where you treat all types of patients or a niche practice where you see only specific types of patients like pediatrics or sports or vestibular rehab clients? You should consider this first because so much of your subsequent actions depends on the answer to this question. There are pros and cons to both.

In the general practice you will draw from a wider target population. The downside to this will be the competition in your area so you may have trouble setting yourself apart from the other PT practices in town.

A niche practice lets you focus on just a specific population or two. If you choose well this will fill a gap in care in your area and you may be the only game in town for those patients. That makes setting yourself from other practices much easier.

One is not better than the other. Success can occur with either. It depends more on your interests and the needs of the population in your area. This leads us perfectly into the next issue.

Marketing and Target Market

Perhaps two of the most crucial issues for creating potential for success are your target market and how you get your message to that market.

Your target market are those people that you really want to see as patients. The decision to have a niche vs general practice is directly related to who you want to focus your practice on serving. To decide this you need to do a market analysis,

A market analysis provides you with an idea of whether there are patients out there looking for the service you are going to provide. If you want to provide vestibular rehabilitation you will want to know if there is a gap in care for those patients. Are there any other PT’s in your area that provide vestibular care? If so how many?

Even if there are other providers you might want to speak with referral sources to see if they are satisfied with the care their patients receive. You may find an opportunity to excel and serve that population better because you are a better provider than the others.

If you are not sure about the number of people in a given area with a particular problem there are numerous ways to seek that information. Referral sources can tell you how many of those patients they see in a month. There are also federal, state and municipal sources with this information.

Insurance Participation vs Cash Based vs Hybrid

Certainly one of your critical decisions needs to be surrounding how will you get paid? Will you participate with Medicare and other insurance companies or have a cash based practice? This decision is often based on the location of the practice or the particular patient population. If your practice is based in a more affluent area then cash may be king. If it is a more working class area where people are older or more likely to be covered by their employer based insurance then you may need to participate with insurances and Medicare.

The one caveat to the ideas above is with many employer based insurances having high deductibles people are paying out of pocket anyway. You may find a cash based business works regardless of local demographics.

The one population you cannot treat unless you participate in Medicare. Patients covered by Medicare cannot be treated, even if they want to, by a non-participating physical therapist.

Last thing to note is that you can run a hybrid practice where you accept both cash patients and insurance patients. If you choose to go , you’ll need to consider carefully which insurances you’ll accept and realize that once you’re accepting some insurances you will have to deal with insurance billing.


One of the most challenging parts of starting a practice is financing the practice. Clinical and office equipment, rent, heat, electricity and water and potentially remodeling of your space initially all need to be paid for up front. Unless you are wealthy, you will need to borrow money or bring in a partner with money.

Most people starting a practice take a loan from a bank. This is challenging because you actually might have to convince the bank you are a good risk for them. After all unlike a mortgage on a house, which the bank can re-possess if you don’t pay, they are giving you money on the promise that you will make enough money in your business to pay them back.

The business plan is crucial here because it lays out exactly how your business will operate. Included is the projection of all your expense as well as your revenue sources and amounts. This can be challenging because it requires calculating start-up costs, operating costs and revenue levels for several years.

Your financing source, bank or other, will most likely want to know when you anticipate breaking even. This can be difficult because your revenue doesn’t start immediately. Insurance payments can take up to 3 months and you never know how fast your cash flow will improve. Financing plans need to account for a long period of steady expenses and a very slow increase in income.

Space and location

Deciding on space needs is directly related to the patient population you are choosing to serve. Patients with vestibular disorders may not need as much space as a patients needing sports or neurological rehabilitation.

Equally important is the location. Ease of accessibility and high visibility are extraordinarily important.  Having your practice visible to all who drive by or utilize your building for other medical services lets people know you are there. You can’t beat free advertising.

One often overlooked location feature is ease of parking or public transportation availability. A sure barrier to success is making your practice difficult to access so be sure to address this early in planning.


Initially, staffing is very easy. To begin you are probably going to limit your staff to you and an administrative assistant. You will treat the patients but you also need your phone answered, your patients greeted and checked in, and someone to deal with all the insurance related tasks we manage today. Outside of you this is your most important addition to your practice.

Advancing your staffing levels will depend entirely on how quickly your patient volume progresses. You may wish to add therapists with specific expertise so you grow that particular area of practice as your patient volume expands. Staffing expansion will need to run concurrently with your revenue growth. You do need to pay your new staff.

Equipment Purchases

The last area of consideration is equipment both therapy/clinical equipment as well as office equipment and furniture. In the beginning you may want to keep your clinic equipment relatively limited. You can then grow that as your practice grows.

You do need certain office equipment and you cannot skimp there. Computers, scanners, faxes (yes, still faxes), and phones along with desks, chairs and tables are really all necessities. For documentation purposes you must start with an EMR. MWTherapy –  high quality EMR system – can give you documentation, billing, scheduling and patient engagement tools. This is no longer a luxury in practice today, it’s a necessity.

It is possible to rent some or all of this equipment rather than purchase. You may wish to consider that if your monthly rental costs are less than if you used your loan to purchase all this material.

The Bottom Line

If you view all the above as an opportunity, then a private practice may be in your future. There are many resources available to assist you. There are also physical therapists out there who are very willing to serve as peer advisors. The APTA can provide help here. The Private Practice Section of the APTA (PPS) is an excellent resource for those choosing to go down this path.

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