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Do You Pay Too Much in Rent for Your PT Practice?

Feb 20, 2019 8:19:00 AM

As a private practice owner, not only do you have to worry about the health of your patients, but also business metrics and financial numbers that measure the health of your business.

One number you may not have analyzed enough is your rent. Obviously, rent varies based on location, size and various other factors – but how can you tell if you’re paying too much?

It’s not a matter of comparing what you pay to what others around you pay, necessarily. The benchmark you should consider is a percentage of your revenue. Your rent should not exceed 7% of your annual revenue, according to FYZICAL business experts.

So, do the math. Is your rent below 7% of your annual revenue? If it’s not, you’re paying too much.

Now, what can you do if your rent is too high? Talk the landlord into decreasing his rate? Probably not.

What you CAN do – is start taking a deep dive into what is causing this problem.

  1. Should you move into a more affordable building?


  1. Are you missing opportunities to increase your revenue and reduce inefficiencies in your business?

If you want growth and expansion long-term, moving into a smaller or lower-quality facility may have a negative impact on your business. You may also lose some of your patients along the way. Instead, take a look at any inefficiencies in your business causing you to lose money, or missed opportunities for increased revenue.

Perhaps you have under-utilized space within your building, or you have opportunity to add retail space to increase cash sales, or maybe you’re not hitting your marks on referral conversions or productivity. In many cases, it’s a combination of these causing practice owners to miss out on potential revenue.

To get started, let’s find out if your practice facility is too big or too small. Believe it or not, in physical therapy, size does matter.

We’ve created a helpful guide to show you how to determine if you’re maximizing your space and how to calculate revenue per square foot. If you’re not already measuring this number, you need to read this.

Click here to download: In PT, Size Does Matter.

Written by FYZICAL

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