Top 5 Reasons Physical Therapy Private Practices Fail

There is no question, private practice has earned a reputation for providing the best in quality patient care, a major advantage over hospital systems. Yet, hospitals and mega physical therapy corporations account for 53% of market share in the US. Why are so many private practices unable to compete with hospitals and mega corporations? Here are 5 reasons:

Why Physical Therapy Private Practices Fail

1. Lack of a Business Plan

Do you know how much revenue your business is going to do this year? Next year? In 5 years? You need a plan with a budget behind it.

Does your business plan leave room for varying factors like expenses? Taxes? Employees? With declining reimbursement, revenue per patient is decreasing.

The cost of doing business is also increasing and you need to make sure you're accounting for this and updating your business plan annually. For example, your practice overhead is increasing (rent, utilities, insurance, etc.), and your labor costs are also increasing as your employees gain more experience, add additional skills, and require as cost-of-living pay increases.

Without a solid plan, your business will drown and your patients will be scooped up by large corporations and hospitals.

2. Not Understanding the Financials

A business can be managed from the other side of the country if you truly understand your financials. Many private practices fail simply because they don't understand how to make themselves profitable and they don't understand how to manage money effectively.

Set measurable, attainable goals and track these goals weekly, monthly, and annually. This can be controlled by incorporating a business model that will allow you to provide the best in quality patient care as well as achieve business success. You cannot manage what you do not measure. Understanding your key performance indicators is imperative when running a business, without these guidelines you won't understand when you are actually doing well financially, or re-position your business when challenges arise.

3. Low Client Satisfaction

Helping your patients get better is a crucial step toward patient satisfaction, but there is so much more to a patients happiness than this.

Consumers look for consistency in the brands they use and this is especially important in healthcare. Incorporating automatic processes brings consistency to a patient's expectations. Communication, patient protocols, the approach to their plan of care, goal setting - all help to set expectations about your brand that clients learn to trust.

Improve communication with clients by automating these responses using their preferred mediums whether it be through email, phone, or even text messages.

While they are in the office, provide additional products and services that appeal to client’s needs to improve their quality of life.

4. Lack of Unique Identity

You've probably seen hundreds, if not thousands, of ads for your big local hospitals or huge corporate brands. That's because brand recognition is what sets you apart from your competitors and, unfortunately, your competitors probably have a lot more of it.

Building brand recognition is accomplished by successfully relaying a message to prospective clients and referring physicians consistently over a period of time. Essentially, staying top-of-mind in your potential customers through a reputation that is built consistently over time. 

Learn More About Marketing Your Physical Therapy Practice

Conveying your message through your website and social media will help you stand out, letting consumers know how hard you are working for them. But don’t just tell them, provide testimonials that show patients how your products and services solve their problems and satisfy their needs in ways that go above and beyond their expectations. Be consistent in this approach.  Do all of your ads have a similar look and feel? Is the tone and voice of your messaging the same across all channels?

Building your brand through marketing is a key component to driving your practice toward becoming a market leader and household name in your community. 

5. Failure to Adapt to Industry Trends and Advancements

Charles Darwin may have said it best, “It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.”

Many times, small business owners don’t realize marketplace changes until it’s too late to do anything about it. The market is constantly evolving and, as a business owner, you need to focus on how to respond to that change.  

Joining a network of peers and business professionals will help you stay current on the newest technologies and best business practices that keep you at the forefront of change in your marketplace.

Learn to compete and thrive in your market by incorporating business systems that can contribute to your success. FYZICAL can help. Feel free to contact us to learn more!