Key Factors to Consider Before Opening Your Next Clinic

Open Sign

Adding clinics may not add value by itself.

By Emily Bagby*

Opening a new clinic is both exciting and a sure way to demonstrate to the world that your practice is indeed growing.

But growth in number of clinics and total rent cost does not add value by itself. Consider the following factors and growth options before you jump into opening your next location.

Assess Clinic Metrics

While this task may not be as exciting as opening a new clinic, it is likely to be the best return on investment (ROI) you can make. If you struggle to manage these metrics in existing clinics, it will likely be even more challenging in a new location. Solid metric management is often the result of strong operating systems and leadership. Check your numbers against Private Practice Section (PPS) benchmarks, like those offered in the Peer2Peer benchmarking program, to assess the growth potential by improving the following key metrics:

  1. Visits per new patient
  2. Units per visits
  3. Arrival rates
  4. New patient conversion rate

Assess Tertiary Referral Trends

Increasing referrals from existing sources, especially those that refer a small number consistently, can be one of the fastest ways to increase volume. Make a list of secondary and tertiary referral sources and create a six-week rotation to improve relations and promote the value of therapy for their patients. Consider hiring a physician liaison or implement advanced sales coaching for existing liaisons.

Fill Existing Clinic Capacity

Before increasing rent expense with a new clinic, focus on maximizing current therapist and clinic capacity. If you have capacity to see additional patients at existing location(s), consider increasing your marketing spend rather than your rent spend. Knowing referral trends will allow you to make the best marketing investments to grow your practice. This may include adding a practice liaison, investing in a patient relations management system, or investing in a pay-per-click campaign. Regardless, it will almost always be less expensive and more profitable to fill existing clinics before opening your next location.

Identify Underserved Markets

Use online mapping software to draw a 5-mile radius around each of your clinics, each of your competitors, and each of your top referral sources. Identify and prioritize areas with strong referral sources and minimal competition.

Assess Acquisition Opportunities

Sometimes the best way to grow your business is to buy another business. Acquisitions can be especially effective if your goal is to increase market share quickly, add specialty services, or enter new markets. Narrow your growth goals and ideal markets, then identify potential acquisition targets.

Explore Employer Contracts

Offering onsite therapy for larger employers is another great way to grow your business. Consider having your physician liaison build relations with key individuals just like any other referral source. These relationships may take time but should keep you up to date when opportunities arise.

Consider a Strategic Partnership with a Local Health System

Bundled payment, population management, and acquisition of physician practices have left many health systems with strong motivation to provide therapy services. That said, therapy is rarely a strength for health systems, making joint ventures or management agreements attractive. Use existing community and physician relationships to identify key opportunities. Communicate your value proposition, which may include increasing access points, improving continuity of care, preventing referral “leakage,” and improving outcomes after surgery or hospital discharge.

In conclusion, assessing the factors mentioned earlier will help you determine whether opening a new clinic or investing your energy into improving the efficiency and performance of an existing clinic offers your greatest return on investment.


Emily Bagby is a physician liaison coach and consultant with 8150 advisors. She has 20 years of experience in marketing, sales, and consulting with hospitals and practice owners on physician relations. Emily can be reached at emily@8150advisors.com.

*The author has a vested interest in this subject.