Six things i should have considered before starting a physiotherapy clinic.
- July 06, 2017 at 8:39am
- Ben Strachan
Starting Your Own Physio Clinic.
Are you considering starting your own physiotherapy clinic? Congratulations, you've come to the right place.
Here in Brisbane, Australia I started and operated three (3) clinics in my career, and without a doubt, the experience was both exciting and stressful. Having gone through the rigours of the physio start-up, I feel that sharing practical, personal insights can help budding physio-entrepreneurs sort out some critical concerns.
With that in mind, I discuss the six (6) most important physiotherapy clinic start-up issues below:
1. Location, location, location!
Choosing the best location to operate your physiotherapy clinic is arguably the most important decision you'll make, one that requires solid research. As a community-oriented endeavour, you must consider socioeconomic factors when researching neighbourhoods, as well as your own personal preferences.
Research can take many forms, for example “on the ground” surveys of people with the question, “Do you think we need a physio clinic?”. However, I chose to analyse the ratio of local doctors to physiotherapists in various Brisbane suburbs to better inform my decision. The location I found was pretty successful, and it had a 4:1 ratio, i.e. four doctors' clinics for every physiotherapist clinic. This meant that we had a good chance to secure steady streams of new patient referrals.
Local competition is another issue to consider, because these days it's hard to find suburbs without a physio clinic. Do you embrace competition as part of doing business? Or are you competition averse and prefer a vacant area? It all depends on your personality type.
Personally, I welcome competition but only if the prospective area possesses desirable demographics (e.g. age, income, etc.). However, when I first embarked on clinic ownership, I also had a personal wish list. For example, I wanted to be closer to home and be near a good coffee shop.
Another factor to consider when choosing location is the number of Google searches. There are heaps of online keyword research tools available that let you estimate the number of people searching for physiotherapy in specific locations. In my case, keyword research helped me choose between Ascot and Hendra, two suburbs in Brisbane.
For the record, Ascot had five times more searches related to 'physiotherapy' than Hendra.
2. Clinic's Physical Size.
It is important to consider how much floor space you need to successfully operate your clinic. Sounds obvious, but unfortunately inappropriate size can seriously hamper your profitability and hinder practitioner-patient relations. Why? Being too small means physical restrictions that limit your future growth opportunities. However, being too big right off the bat means excessive, fixed monthly costs (i.e. rent, utilities) that may be hard to cover. So what's an aspiring start-up to do?
I decided on a two-part strategy. Initially, I had a very small location with flexible lease conditions, knowing that if I failed, I could quickly cease operations at minimal financial cost. On the other hand, success would give me the opportunity to move to a nearby larger location.
Fortunately after the first year, the clinic was pretty busy. This gave me the confidence to sign a longer lease at the new (second clinic) location (N.B. Landlords love longer leases!). We managed to get the fit out included in the rent of the larger location, which was very helpful.
I confess to hating accounting and tracking cash flow. Boring as it may be, however, you must be vigilant to avoid bad start-up surprises.
I got into some trouble when opening my clinics, because everything was more expensive than I had projected. Although we had steady growth, initial revenue didn't reach my ambitious targets.
Luckily in my case, the locations quickly became busy. The credit card debt was paid and everything worked out. Therefore, consider the following advice:
- Everything will be much more expensive than you expect. Your budget might be accurate with major items, but there are many smaller items that, although not individually significant, add up to heaps of money.
- Predicting patient numbers is difficult. I was fortunate to have steady growth during my start-up period, but I was keenly aware that as a new business, you’re more susceptible to fluctuations. Public holidays and school holidays can be especially difficult. I experienced a large drop-off in new patients and didn't have regular loyal patients to fill the gaps. Slow periods can be really slow in the early days.
4. Marketing Considerations.
A former employee once left my clinic to start a physio business. I asked her how she was going to get patients, to which she replied, “word of mouth”.
Hmmm. Immediately, I knew she would be back, because it was clear that she hadn't embraced marketing. New businesses, especially physio clinics, are very difficult to establish and require deft promotion, public relations, appropriate advertising and other marketing tools. Whereas established businesses can draw on community good will and their reputation, new clinics rely on asking people to change their physio.
It's likely that people have visited other practitioners previously, so why are you better than others? As a general rule, I advise a process that we can call a “reverse engineering” of patient demand. New clinic owners need to do what the competition is not prepared to do. In my experience, working on weekends was very popular with patients, and I found that bulk billing and home visits also helped my business stand out from competing physio concerns.
Don’t get me wrong, weekend work is not for everyone. It can be extremely hard on young families and everyone's social life. However, I followed a “short-term pain for long-term gain” strategy: Sacrifice a year's worth of weekends, grow awareness and presence in the local community, and then bring in other staff to complete weekend tasks on your behalf.
Please consult this blog post [link here] to learn how to get more patients.
5. Physiotherapy Equipment.
Physiotherapy clinics can accumulate a lot of equipment over time, so it's useful to classify it into two (2) groups:
A) The “Must Haves”.
B) The “Could be Usefuls”.
At the start, limit your spending to “must haves” as much as possible, even if your initial cash flow looks good. Gradually build up your inventory over time based on your patients' requirements. In my case, I decided to setup just one room with individual serves of equipment, i.e. the smallest volume of products possible.
First impressions are very important, and when patients walked into my clinic, they could tell we were new. My first one-room clinic was extremely bare, which counter intuitively worked to my advantage. I don't have concrete evidence, but for the most part, I believe that patients enjoy being a part of a physio clinic start-up. Perhaps it's the idea of getting in on the ground floor before the clinic becomes too big? Of course, it always comes down to providing superior healthcare and customer service - with quality equipment.
6. Receptionist or Call Answer Service?
Receptionists can be very expensive and are unlikely to generate new business for you. That being said, they usually develop a good rapport with existing patients – something that may lead to higher charges later on.
The alternative to hiring a full-time receptionist is a call centre or virtual receptionist. Unfortunately, virtual receptionists have a reputation for poor service (e.g. long delays before answering calls). They are unlikely to be very knowledgeable about physio services, and those paid by the minute tend to be slow. Very slow, often times annoying, and expensive.
When I started my third clinic, I was fortunate to be able to use the other clinics' reception to handle my calls. However, if I was starting a clinic today without the benefit of any other clinics, I would do the following:
- Setup the clinic phone number as a virtual phone number. This number would require simultaneous ring features, i.e. the ability to ring at two numbers at the same time, e.g. your mobile phone and your call centre. This allows you to properly track time needed to answer inquiries. Chances are that you’ll be answering the majority of calls.
- As business volume grows, employ a student(s) for after school periods. Enthusiast junior receptionists can be hired at relatively low rates, and can do much more than just answer calls. They can be trained to handle cleaning, billing, general setup, etc.
Owning and operating a physiotherapy clinic can be a fulfilling experience for practitioners who yearn to combine their healthcare skills with business acumen. Certainly, it's easier to strictly remain a physiotherapy employee, but if you are up for a challenge, this may be the right career path for you.
After several years, I've stepped away from the day to day management of clinics. However, I’m glad to have started a clinic, because it gave me the skills, experiences, and contacts I would not have achieved otherwise.
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