It’s the Little Things That Matter in the End

By Nitin Chhoda, PT, DPT

“If you cannot do great things, do small things in a great way.” -Napoleon Hill

When a therapist becomes a business owner and runs their own practice they are often faced with the decision of whether or not they want to grow their practice. From a numbers standpoint only, I am going to highlight why growing your practice makes sense. There are also other factors other than the numbers that could influence your decision with regards to growth.


A practice has one physical therapist, and all the revenue in the practice is generated by that physical therapist. This “primary physical therapist” is also the owner and has an income goal of $300,000 a year.

Let’s say the primary physical therapist:

  • Completes 60 patient visits a week
  • Gets reimbursed $80 per patient visit
  • Brings in $4800 in weekly revenue

Assumption: The practice has marketing mechanisms in place that bring in 20 to 25 patients a week, with each patient scheduling an average of three appointments a week.

In this situation, let’s say the weekly expenses (including rent, utilities, and payroll of staff including the front desk salary) are $2,000. We have identified all four of the key practice metrics. The net profit of the clinic (total income minus total expenses) is about $2,800.

Even though the net profit is $2,800, the income goal of the practice owner ($6,000 a week based on the target of $300,000 a year) has not been met.

For this example, I am assuming that the corporate structure is a limited liability company (LLC). With an LLC, the profit of the business becomes the income of the owner. If you have another corporate structure, it is best to seek the advice of an accountant or certified tax professional.

Now, let us say that one additional provider is added to the clinic.


With the right marketing, the net profit of $2,800 continues and a positive return on investment takes place. The practice starts to grow. This creates the need to hire an additional therapist.

If an additional therapist was brought into the clinic, and he / she also had the same productivity, then that secondary physical therapist also:

  • Completes 60 patient visits a week
  • Gets reimbursed $80 per patient visit
  • Brings in $4,800 in weekly revenue

Assumption: With effective marketing and planning, you can fill the schedule of the secondary therapist. The secondary physical therapist has similar efficiency and similar revenue generation potential (treatment time, documentation time, billing methods) as the primary provider. Expenses see a nominal increase because systems and software to automate and streamline documentation, billing, and marketing are already in place.

Now, let us assume that the salary of this full-time physical therapist is $40 an hour, including benefits, so you are looking at $1,600 a week in expenses. The rest of your expenses do not go up. They stay the same and have already been taken into consideration in scenario one.

The net profit for the clinic from this secondary provider (total income minus new expenses that include the salary of this physical therapist) is about $3,200.

The combined income from the primary ($2,800) and the secondary ($3,200) is now $6,000 a week. This allows the owner to reach the objective of $300,000 a year in net revenue for the practice.

In this scenario, a one-man private practice owner can achieve financial independence by adding just one more provider to the practice. There is a simple, but powerful lesson here.

The Powerful, Life-Changing Lesson

As you add more providers, a significant portion of their income drops straight to the bottom line of the practice. With the first provider, a large part of the income is used to cover costs of rent, utilities, payroll, and miscellaneous costs.

In making the decision to grow, based on the above scenarios, its important to look at your “practice metrics.” Here are a few that you might consider:

  • Weekly patient visits
  • Average reimbursement per visit.
  • Average weekly expenses (rent, utilities, staff, and miscellaneous expenses).
  • Income goal

This data will reveal vital clues about where you are and where you should be going. Based on your income goals, you can reverse engineer the financial trajectory of your practice. With simple numbers, you can pave the way to success.

To grow a practice, it is important to be in continuous marketing mode. Marketing is the engine that drives your practice. In any given week, the number of initial evaluations should meet or exceed the number of discharged patients if you want to grow your practice.

Understandably, this can be a challenge because marketing is not something we are taught in physical therapy school. This means that practice owners have got to be in constant marketing mode. As an owner, you can never take your foot “off the gas,” and you have to plan ahead for your practice.

The only way to be in constant marketing mode is by using the right systems and the right people. In fact, well-planned marketing campaigns that bring in a positive return on investment allow you to:

  • Increase income
  • Hire additional therapists
  • Build your expert status with patients and physicians
  • Reduce stress

If you are a private practice owner and a treating therapist, it is hard to juggle marketing, documentation, and patient care. However, the biggest breakthroughs happen when you pull yourself away from the day-to-day activities of your private practice and look at the big picture.

If you are just starting out, rent, utilities, and salary will be your biggest expenses.

As you become more advanced with your marketing, you can answer questions such as:

How much am I willing to spend on marketing, without hesitation, to acquire a new patient in my practice?

Knowing your maximum threshold here will help you reverse engineer your marketing budget, and allow you to make smarter decisions about how to grow your practice. This is called the patient acquisition cost or PAC value for your practice.

Before you estimate your PAC, you must know: your net profit per new patient. Typically, private practices make between 10 and 25 percent net profit per patient, but this depends on several factors like overhead and reimbursements.

For instance, If your average reimbursement (collected amount) is $70 per patient visit, and the patient comes in for 12 visits, your gross revenue is $70 x 12 = $840. Your net profit (after expenses like wages, utilities, rent, marketing) is $140 (which is 20 percent). The question now is—how much of that $140 are you willing to spend (on more marketing) to acquire new patients?

The top five ways to lower your patient acquisition cost

  • Detailed tracking of your expenses with different marketing mechanisms (ask your accountant for help if numbers are not your strength)
  • Identifying not only how many patients came in, but also where they came from
  • Tallying up the numbers to identify your exact PAC and eliminating one mechanism each week (the one with the highest PAC needs to go)
  • Word of mouth referrals from existing patients (the low-hanging fruit for growth in your practice)
  • Engaging patients with current events and trending topics that interest / affect patients through workshops, newsletters, and social media

When it comes to growing your practice, it is the little things that matter the most.

Nitin Chhoda, PT, DPT, is a PPS editorial board member and is the chief executive officer of In Touch EMR and In Touch Biller Pro. He can be reached at

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