PT Classroom - Locating a Private Practice Physical Therapy Clinic ׀ by Chad Novasic, PT


Chad Novasic is the President and CEO of Alliant Physical Therapy Group. He is a 1988 graduate of Marquette University. His focus has been in the field of outpatient orthopedic rehabilitation and injury prevention. Chad has been an independent Physical Therapist since 1989. He is proud to be active in the community having served as President of the Wisconsin Independent Physical Therapists, and on the Board of the Racine Founders Rotary and the Wisconsin Physical Therapy Association. Over the years, Chad's passion for physical therapy and helping others has complimented his capacity to help fellow physical therapists open and run successful private physical therapy practices.  

Locating a Private Practice Physical Therapy Clinic

You are ready to take the plunge into opening your own private practice office. You have done the numbers, and are ready to commit. But how do you find a location that will maximize your opportunity for success?

The first thing you need to do is look at the population and your market. How many people live in your service area? How many Physical Therapists already service these people? Where are your competitors located? Where are your potential referral sources located? This is an important part for locating the area or town in which you want to open. In rural areas your service area may be a 10-20 mile radius around your clinic. Our experience is that one Physical Therapist would need a population base of 2,500 – 3,500 people to sustain a private practice. However in most midsized to larger communities there are hospitals and a private practices. In these cases we have found it best to locate in high traffic areas in which there is good population density. You may also want to consider locating in a place that is convenient for patients from your major referral sources. This could be in the same professional building, or nearby center.

Once you have an idea about general location, you need to consider the size of your clinic and the services you want to offer. If you plan on having 40-60 patient visits per week, a clinic of 1600-1800 square feet should meet your needs. If you plan on seeing 60-120 visits per week you may need a space 2200 -2500 square feet. If you plan on seeing up to 200 visits per week you should consider a space of 3000 – 4000 square feet. You must also consider the type of services you plan on providing. If you plan on doing fitness or a medical oriented gym you will need much more space to meet your needs.

In today's economy there is quite a bit of rental space available. You need to take several things into consideration. Is the space you are looking at already set up in a way that you can move in as is? This can work although the layout may not be ideal. You will probably take a little more space than you need, but you will save significant construction costs. If the space needs to be “built out” you need to consider the cost. Many developers and landlords will include construction costs in your lease. This usually requires a commitment of at least 5 years. If you only want to commit to a shorter term, you will most likely need to pay for construction costs.

Traffic is important! In the old days a private practice clinic was a destination. Patients would find you wherever you were located. However, in today's healthcare market, consumer choice is becoming a bigger part of the picture. Therefore it is important to locate in high traffic areas and have good signage! The bigger the better. People want Physical Therapy near their work or home. So they need to know you are there. Make sure you know the buildings rules and allowances for a good sign before you sign the lease.

Negotiating a lease can be tricky. Remember most business fail due to a lack of operating capitol. Therefore cash is king! You want to negotiate a lease that maximizes your cash flow as well as mitigates your risk. If there are extensive build out’s required you may need to negotiate a long term lease and have the build out cost put into the lease. If minimal construction costs are required you may want to negotiate a one year lease to limit your risk. Here are some things to consider: Can you defer your first few months of rent from the beginning of the lease to the end of the lease? Can you have a 90 day out clause during the first 2 years of your lease? Who pays for utilities? What are the Common Area Maintenance (CAM) costs? Who is paying the Property Tax? Don’t be shy when negotiating a lease. You need to do this right!

Now you are ready. You have a great location. You have a rent that fits your budget. People will find you. Now it is up to you to make it work!

Other Private Physical Therapy Practice related articles by Chad
- Starting a Private Physical Therapy Practice
- Basic Equipment for Starting a Private Physical Therapy Practice
- Physical Therapy Private Practice Tips - Red Flag Rules


Last revised: June 21, 2012
by Chad Novasic, PT

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