Physical Therapy Business Plan Template
If you want to start a Physical Therapy business or expand your current Physical Therapy business, you need a business plan.
The following Physical Therapy business plan template gives you the key elements to include in a winning Physical Therapy business plan.
Physical Therapy Business Plan Example
I. Executive Summary
Business Overview
[Company Name], located in [insert location here] is a new physical therapy clinic that focuses on providing a holistic, personalized approach to each client’s treatment. The clinic offers
comprehensive services for those requiring physical therapy. Each session includes manual treatment, therapeutic exercise, patient education and behavioral-modification strategies. The clinic employs a highly-trained and skilled staff dedicated to increasing their clients’ quality of life through physical therapy.
Products Served
[Company Name] will provide physical therapy services for all ages. Services will include rehabilitative physical therapy, occupational physical therapy, geriatric physical therapy, and pediatric physical therapy.
Services are provided based on orders from the patient’s doctor and each therapist will be in close contact with the physician to update them on their progress, if they are having any issues and/or need to modify their therapy plan.
Customer Focus
[Company Name] will primarily serve the residents within a 5 to 10-mile radius of our location. The demographics of these residents are as follows:
- 75,626 residents
- Average income of $53,000
- 52.6% married
- 36.4% in Management/Professional occupations
- Median age: 41 years
In addition, about 36% of the residents are seniors. This customer segment constitutes a large percentage of physical therapy patients.
Management Team
[Company Name] is led by [Founder’s Name] who has been a physical therapist for over 30 years. He has worked in hospitals, private practice, and other clinics in the community and has a very positive reputation. Not only does [Founder] have all the experience, qualifications, and training necessary, he has employed a qualified and experienced team of physical therapists who specialize in the many services [Company Name] has to offer.
Success Factors
[Company Name] is uniquely qualified to succeed due to the following reasons:
- The location will be providing a valuable service to an underserved industry in the community. There are many residents seeking physical therapist options, and they don’t have a lot of physical therapy clinics to choose from.
- The location is in a high-volume area that is nearby to hospitals, other physician offices, and urgent care centers.
- The management team has a track record of success in the physical therapy industry.
- The pricing model is beneficial for everyone involved. Patients will feel they are receiving value for the therapy they are receiving and the clinic’s profit margin is wide.
- [Company Name] will accept most insurances.
Financial Highlights
[Company Name] is seeking a total funding of $250,000 of debt capital to open its physical therapy clinic.
- Physical therapy clinic design/build-out: $100,000
- Equipment and supplies: $75,000
- Working capital: $75,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Top line projections over the next five years are as follows:
| Financial Summary | FY 1 | FY 2 | FY 3 | FY 4 | FY 5 |
|---|---|---|---|---|---|
| Revenue | $560,401 | $782,152 | $1,069,331 | $1,379,434 | $1,699,644 |
| Total Expenses | $328,233 | $391,429 | $552,149 | $696,577 | $776,687 |
| EBITDA | $232,168 | $390,722 | $517,182 | $682,858 | $922,956 |
| Depreciation | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 |
| EBIT | $225,168 | $383,722 | $510,182 | $675,858 | $915,956 |
| Interest | $6,016 | $5,264 | $4,512 | $3,760 | $3,008 |
| Pre Tax Income | $219,152 | $378,458 | $505,670 | $672,098 | $912,948 |
| Income Tax Expense | $76,703 | $132,460 | $176,985 | $235,234 | $319,532 |
| Net Income | $142,449 | $245,998 | $328,686 | $436,864 | $593,416 |
| Net Profit Margin | 25% | 31% | 31% | 32% | 35% |
II. Company Overview
Who is [Company Name]?
[Company Name], located in [insert location here] is a newly established physical therapy clinic that focuses on providing a comprehensive range of physical therapy services for patients of all ages and backgrounds. The team of therapists are all uniquely qualified and trained in different physical therapy specialties. The clinic provides therapy programs based on individual needs and medical issues.
[Company Name] was founded by [Founder’s Name], a local physical therapist who has been treating patients for over 30 years. During his tenure [Founder] has made a reputation in the community for his ability to listen to the patient, feel their pain points, and be able to customize a treatment plan for them to adhere to. His physical therapy will always align to what the prescribing doctor specifies.
[Founder] has always dreamed about running his own clinic, but when he researched the market demographics, he found that his community is in need of local, physical therapy services. The majority of individuals who require physical therapy are aging adults who have either had some minor injuries or find that they are unable to move like they used to.
[Company Name]’s History
Once his market analysis was complete, [Founder’s Name] began surveying the local customer base and located an ideal location for the physical therapy clinic. [Founder’s Name] incorporated [Company Name] as a Limited Liability Corporation on [date of incorporation].
Once the lease is finalized on the clinic space, light construction can begin to build-out the office.
Since incorporation, the Company has achieved the following milestones:
- Located available clinic space for rent near other medical facilities
- Developed the company’s name, logo, and website located at [website]
- Hired a general contractor for the build-out of therapy rooms, small office, and waiting area
- Determined equipment and necessary supplies
- Began recruiting key employees with previous physical therapy experience and qualifications
[Company Name]’s Products/Services
Below are [Company Name]’s service offerings:
A team of physical therapists will be able to perform the following therapy services for patients of all ages:
- Neurological physical therapy
- Occupational physical therapy
- Geriatric physical therapy
- Pediatric physical therapy
- Hand & Foot physical therapy
III. Industry Analysis
Over the last five years, the physical therapy industry experienced revenue growth as a result of the aging population and increasing acceptance of the benefits of physical therapy services. The number of adults aged 65 and older has also helped support industry revenue growth because seniors are more likely to require physical therapy services due to the increased prevalence of injuries, illnesses and chronic conditions in that age group. The number of stroke patients and sufferers of other chronic diseases will also likely increase in line with demographic growth, prompting elevated demand for rehabilitation services.
The aging population and healthcare reform are all expected to contribute to industry revenue over the next five years. The number of Americans aged 65 and older is expected to rise an annualized 3.0% during the five-year period, which will increase demand for physical therapy services. Moreover, increased funding for Medicare and Medicaid are likely to support access to healthcare, which will enable more people to receive treatment and therapy.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve the community residents of [company location] and its surrounding areas.
The community of [company location] has thousands of aging adults, veterans and individuals who are regularly involved in athletic activities. Many of these residents require physical therapy due to their aging bodies, prior military service, or have suffered a sports or outdoor activity injury of some kind. These individuals require a friendly, clean, and qualified clinic where they can receive comprehensive care.
The demographics of the city that our business will be located in are as follows:
| Fort Lauderdale, FL | |
|---|---|
| Total Population | 9,818,605 |
| 15 to 19 years | 753,630 |
| 20 to 24 years | 752,788 |
| 25 to 29 years | 759,602 |
| 30 to 34 years | 716,129 |
| Total Households: | 3,218,511 |
| Household income $50,000 to $74,999 | 550,971 |
| Household income $75,000 to $99,999 | 382,770 |
| Household income $100,000 to $149,999 | 440,285 |
| Household income $150,000 to $199,999 | 187,449 |
| Household income $200,000 or more | 208,954 |
Customer Segmentation
The Company will primarily target the following three customer segments:
- Aging seniors: The area has a large population of aging adults who require physical therapy due to a recent fall or have arthritic pain. Many of these individuals can be found living in retirement homes, acute care facilities, or at their homes. They will be referred to us by their primary care physician.
- Veterans: The area is also home to numerous veterans who are suffering from prior injuries suffered during military operations or during combat. Lots of the veterans look towards options outside the VA and military hospital as they would prefer a different level of care.
- Adults/Young Adults/Children: The Company will also target those who regularly participate in a sport or outdoor activity. Many times these activities cause minor injuries that would require physical therapy to get them back to their normal active selves.
V. Competitive Analysis
Direct & Indirect Competitors
The following businesses are located within a 10-mile radius of [Company Name], thus providing either direct or indirect competition for customers:
Let’s Get Physical
Let’s Get Physical provides physical therapy utilizing a highly-skilled team of physical therapists that are 100% focused on helping the patient achieve optimal health and wellness. Considered a leader in the health and wellness space, the business provides private practices with business systems, operational support, clinical education, and their proprietary technology and protocols. Let’s Get Physical provides their patients with wellness programs and clinical care in: Fall Prevention, Orthopedic, and Vestibular Rehabilitation.
In addition, Let’s Get Physical provides orthopedic rehabilitation, balance therapy, fitness and wellness, occupational therapy, pelvic therapy, neurological rehabilitation, audiology, and other specialty services such as foot, laser, massage, myofascial, and aquatic therapy. The clinic prefers to utilize a holistic, whole-body approach to connect the patient’s diagnosis with a customized plan of care.
In order to be seen at Let’s Get Physical, a patient must have a referral from a doctor.
Complete Physical Wellness and Rehab
Complete Physical Wellness and Rehab is an outpatient physical therapy clinic that serves pediatric and geriatric patients in the area. They focus on the pain in order to regain optimum function of the affected areas in order to improve the quality of life for the individual.
As an independent clinic that was opened by a team of prior physical therapists, the clinic provides the following services:
- Lymphedema Treatment
- Dry needling
- Pain management
- Pediatric physical therapy
- Geriatric physical therapy
- Orthopedic conditions
- Neurologic conditions
- Musculoskeletal conditions
- Reconditioning
- Wellness program
Spine & Rehab
Spine & Rehab is the oldest of the local physical therapy clinics in [location]. Established in 1997, the company has been treating patients in the community for over 20 years. Owned by a husband-and-wife team of physical therapists, the company offers the following services:
- Orthopedic rehabilitation
- Sports medicine
- Functional dry needling
- Vestibular rehab
- Concussion management
- Aquatic therapy
- Workers’ compensation
- Musculoskeletal ultrasound imaging
In addition to the above services, Spine & Rehab of [location] carries the following specialized equipment – Alter G, Biodex, Repex, HydroWorx 500, and a multi cervical unit.
While the business does accept most insurances, they are well known to be booked for months in advance. If they are a patient that is not regularly seen by them, they will not be able to be seen by a therapist for months.
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. Those advantages include:
- Location: [Company Name]’s location is near the center of a highly populated and newly established neighborhood. There are multiple doctors offices and a hospital within a 5-mile radius. We also offer adequate parking that makes it easy for patients to visit us. They will not have to go through a parking garage or park blocks away that will make it inconvenient for them.
- Superior therapy with no long waiting times: [Company Name] will prioritize the patient’s time spent and realize that it is valuable. All patients will have no waiting time and will receive an appointment within 2 – 3 days of calling to schedule an appointment. We realize the patient is in extreme pain and the sooner they receive therapy services, the better.
- Management: The owner has years of physical therapy experience that will allow him to serve patients in a much more sophisticated and professional manner than the competition. Each patient will receive at least a consult by the owner and he will be heavily involved in each patient once they are assigned to a qualified therapist on his team.
- Equipment: [Company Name] will invest heavily on the latest advancements in the physical therapy industry and will provide the latest technology to each patient that may benefit from it.
- Convenient location
- Qualified and highly trained team of physical therapy professionals
- Significant personal attention
- Comfortable, relaxing, and modern atmosphere
- Very short wait time
- Occupational therapy
- Geriatric therapy
- Pediatric therapy
- Neurological therapy
- Hand and foot therapy
- Maintenance personnel
- General and administrative functions including legal/compliance, marketing, bookkeeping, etc.
- Hiring and training staff
- Appointment making and patient in-take
- Medical biller/coder
- Equipment and supply procurement
- Assistant Clinic Director: 1 full-time employee to manage the day-to-day business operations and assist [Founder] with managerial duties.
- Therapy staff: 5-6 full-time physical therapist employees who will work every day from 8:00 am – 5:00 pm.
- Office staff: 3–4 employees who will manage the patient in-take, appointment, clerical, bookkeeping, billing, and any administrative task required.
- Janitorial staff: 2 employees who will clean the clinic once it has closed for the day.
- Salaries
- Therapy supplies and equipment
- Business Insurance
- Lease on business location and utilities
- Taxes
- Physical therapy clinic design/build-out: $100,000
- Equipment and supplies: $75,000
- Working capital: $75,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
VI. Marketing Plan
[Company Name] seeks to position itself as a respectable, fully-comprehensive physical therapy clinic in the therapy market. Patients can expect to receive professional physical therapy services from skilled therapists than anywhere else in [location].
The [Company Name] Brand
The [Company Name] brand will focus on the Company’s unique value proposition:
Promotions Strategy
[Company Name] expects its target market to be individuals living within a 5-10-mile radius of its location. [The Company’s] promotion strategy to reach these individuals includes:
Local Publications
[Company Name] will announce its opening several weeks in advance through publicity pieces in multiple local newspapers and publications. Regular advertisements will run to maintain exposure to relevant markets. Community newspapers, medical publication, sports programs, and similar channels will be a major promotion effort.
Major Publications
We will also invest in advertising in selected larger publications until we have achieved significant brand awareness. Advertisements such as billboards and commercials will be shown during peak TV watching time and the billboards will be placed in highly trafficked areas.
Medical Events/Organizations
[Company Name] will promote itself by distributing marketing materials and participating in local medical industry events, such as health fairs, sporting events, etc. We will either purchase a table to display our services and hand out brochures and flyers and we will purchase an ad space in the event’s program.
Doctor’s and Urgent Care Offices
The owner will visit multiple doctors and urgent care offices to ask them to refer our clinic to any patient that will need to be referred to physical therapy. We will ask they keep a handful of our brochures on hand in hand them out to whomever requests a physical therapy clinic or is in need of one. Because the owner is well-known in the industry, he believes the doctors and urgent care clinics will be happy to keep his brochures on hand.
Ongoing Customer Communications
[Company Name] will maintain a website and publish a monthly email newsletter to advise patients, doctors, and urgent care clinics about their services, equipment, etc.
Pre-Opening Events
Before opening the clinic, [Company Name] will organize pre-opening events such as an open house to draw future patients to visit the facility and take a tour. When they see the new, clean, modern clinic with the latest technology, they will be enticed to switch from their primary physical therapy provider.
Pricing Strategy
[Company Name]’s pricing will be moderate, so patients feel they receive great value when obtaining the physical therapy services. Whatever amount that is not covered by insurance, patients will be happy to pay the small remaining amount for more individualized attention and a much smaller wait time.
VII. Operations Plan
Functional Roles
[Company Name] will carry out its day-to-day operations primarily on an appointment basis. Patients will need to call the company beforehand to make an appointment. [Company Name] will have a comfortable waiting area, but patients are likely to be seen within 5–10 minutes of checking in at the front desk.
In order to execute on [Company Name]’s business model, the Company needs to perform several functions. [Company Name] anticipates using the services of X employees, divided into the following roles.
Service Functions
Administrative Functions
Milestones
The following are a series of steps that lead to our vision of long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] is headed by its founder, [Founder’s Name] who has been a physical therapist for over 30 years. He graduated from [University] with a degree in Occupational Therapy. He also has all the necessary licenses and certifications to not only perform physical therapy services, but run a clinic. After working for many years in a hospital and larger corporate physical therapy clinics, [Founder] has gained a good reputation in the community and has become a highly sought after physical therapist. He knows that if he were to open a place of his own, he will not have a problem garnering patient clients.
Hiring Plan
[Founder] will serve as the Owner and Manager of [Company Name]. In order to launch, he needs to hire the following personnel:
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come primarily from physical therapy services. The company will bill the patient’s insurance for services provided, and the remainder will be billed to the patient.
The location lease, equipment, supplies, and labor expenses will be the key cost drivers of [Company Name]. The major cost drivers for the company’s operation will consist of:
Ongoing marketing expenditures are also notable cost drivers for [Company Name].
Capital Requirements and Use of Funds
[Company Name] is seeking a total funding of $250,000 of debt capital to open its physical therapy clinic. The capital will be used for funding capital expenditures and location build-out, hiring initial employees, marketing expenses, and working capital.
Specifically, these funds will be used as follows:
Key Assumptions
The following table reflects the key revenue and cost assumptions made in the financial model:
| Number of Clients | Average |
|---|---|
| FY 1 | 100 |
| FY 2 | 120 |
| FY 3 | 150 |
| FY 4 | 200 |
| FY 5 | 225 |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRE-TAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
