Running a business isn’t easy. Each day there is no guarantee how much revenue is going to come through the door, nor how much your expenses will be for that day or how to grow and maintain your client base.

University and further study are geared towards how to be a great physiotherapist and furthering technical skills, but this does not guarantee commercial success, or that of a successful business.

When I first started in business in 2002 there were many different business models; almost 20 years later, the options are still very similar.

I knew that I wanted to do things differently in my physiotherapy practice, but didn’t have a clue how.

I would like to explore a few of the business models available so if you are starting in business, or are already in one and want an idea of how to do things a bit differently, you are able to make an informed decision.

The sole practitioner

Being a sole practitioner is the easiest and most cost-effective way to begin.

Realistically, most large physiotherapy practices started this way. Firstly, your costs are small. You only have to look after yourself so you need a small space, a small amount of equipment and you can get started.

When I started out, I rented a small room, bought a second-hand treatment couch, a small desk, a computer and some basic stationery and I could open the doors.

The biggest challenge with being a sole practitioner is that you are everything—the business and the service that produces income.

So, the first and hardest step is getting customers in the door. You don’t know enough people who will come to see you and you may not have any referral partnerships yet, so these all have to be established, which takes time and effort.

The problem is, you also need to see patients to generate income, which takes time away from marketing, establishing a client base and building relationships, and vice versa.

So finding the balancing act between being busy enough to generate income for the desired needs and finding the time to perform all the business activities required to run the business, especially the marketing, is the monumental challenge of working for yourself.

The biggest upside of being a sole practitioner is that you can do what you want and you are accountable only for yourself.

This means that you can concentrate on a small aspect of your craft that you want to be really good at and not focus on everything.

For example, if you wanted to be a ‘shoulder’ physiotherapist and nothing else, you can direct your study, equipment, set-up and everything else to only focus on shoulder issues.

You won’t need a lumbar traction table or to stock knee braces if you are only seeing shoulder patients; it would be a waste of your resources.

In addition, as you are the only practitioner you don’t have to worry about training staff and other practitioners. You can focus on your own training, your own reputation and the results that you get for the patients you see, without having to worry about the services anyone else provides.

The downside is that you only have a certain amount of time in the day, so you can only see so many clients.

Even if you hire a receptionist or practice manager to run the business side of the practice, so you can focus on just seeing patients, your time and income will always be limited by the number of patients you can see and the amount you can charge for your services.

Being a sole practitioner is a great option for those wanting to start from scratch with a relatively low-cost model.

Practice with multiple practitioners

Another way to get into business is by buying a share of an existing business, starting as a junior partner and progressing to a senior or managerial role.

The biggest advantage of a larger, multi- practitioner practice is that you are no longer alone.

The service is not just you, it is no longer reliant on what you can produce and your skills, but there is a shared responsibility between practitioners and together you can often solve bigger problems than one practitioner alone can.

In addition, the income of the business is not as limited by your time and your ability to generate it because you can hire more staff; instead, it can be more reliant on the business’s marketing capabilities and the ability to attract and keep a larger number of clients.

In general, the costs of running a multiple practitioner business are higher. The building, equipment and staff costs are higher to accommodate more staff.

However, as these costs are generally fixed, the larger the business the more margin for profit there is, although the marketing requirements of the business are higher.

If, on average, after an initial consultation, each patient sees the practitioner another five times (total six consultations), for an average working week, the number of new patients per practitioner per week is 7.6 (assuming each practitioner is busy 60 per cent of the time and consultations times are 30 minutes each).

This means that a practice of four practitioners needs to attract 30.4 new patients a week to be sustainable; therefore marketing and sales must be a major consideration of the multiple-practitioner business.

The other major consideration is the training, development and management of staff.

To ensure that everyone knows what their role is, what is expected of them and that everyone in the business is working in the same direction, good training and communication systems are needed for the business to run well.

In addition, everyone is different, so being able to work well with other people is a very important aspect of this type of business.

If not managed well, it can be a major cause of conflict and headache for the business, and take attention and resources away from the main function of the business—seeing patients and making them better.

All under the same roof: the multidisciplinary model 

A few years ago the idea of a multidisciplinary clinic was a popular concept.

This is, theoretically, ideal for patients to get all the services they need under the same roof.

The patient can see their GP, then see their physiotherapist, the podiatrist and maybe their dietitian all in the same place. It seems like a win for everyone.

Unfortunately, in my experience, it really doesn’t always work this way and the professions rarely actually refer or even talk to each other; it becomes no more than a bunch of practitioners sharing rent.

The potential advantage of this model is twofold. Firstly, from a business perspective, it can reduce your marketing costs.

By having direct access to the other practitioners, they could be great referral partners, but this does mean investing time and effort into the relationships to build a strong base of trust.

If they don’t know you and they don’t trust you, they will not refer to you, even if you are only a couple of rooms away.

Secondly, they all have to be great practitioners. The convenience of having close access to other practitioners may not make up for the problem that they are just not good at what they do.

This is not good for the patient, nor is it good for your brand and marketing.

So, if you are going to go into business with, or share the same space as, other disciplines in a one-stop shop scenario, be very discerning about who is also under your roof and whether they are great at what they do.

Exercise services

This is the type of service my business offers. This is not a blueprint for how to run this type of model, but the one that works for my team.

Our major focus is exercise-based rehabilitation and strength training for our patients.

As a result, we are well suited to treat patients with long-term rehabilitation needs, such as long-term lower back rehabilitation or rehabilitation after hip or knee replacement.

The set-up and layout of the clinic is focused on the gym area and the rehabilitation equipment, not the rooms and hands-on treatment.

As a result, we are great at long-term rehabilitation and exercise training, but there are other physiotherapy practices that are better than us at manipulative treatment and focusing on reducing the patient’s short-term pain.

That’s okay because it is not our focus nor how our resources are allocated in the clinic.

What does this mean from a business perspective?

Because we focus on long- term patients, our patient turnover is lower, so our need to market is lower.

Our major marketing strategies focus on patient retention strategies and keeping patients on track with their long-term rehabilitation rather than getting new patients through the door.

The result is that the average patient value increases from about $600 per patient (based on $150 initial consultation plus five standard consultations at $100 each) in the traditional business model to about $4000 a patient (based on internal data).

In addition, because the focus is time in the gym area and not time spent in the rooms with the physiotherapist, we can have services where the patients are seen two-on- one or three-on-one with the physiotherapist, while the patients are still closely monitored.

As a result, from a business perspective, we can increase our hourly billing rate, without charging the patients more.

The challenges are different. Although we need fewer new patients to grow and maintain the business, we need to educate the patients and the referrers on our services and when long-term rehabilitation is required.

Furthermore, because we are seeing more than one patient at a time, we have to invest more in systems and IT so that the quality of the service is maintained without the patient having one-on-one attention.

Lastly, because we share the patients with different practitioners, we need to work very heavily on communication, meetings and really being about to understand each other in order to produce a great service for the patient.

The point of this article is not to tell you the right model for running a physiotherapy business, but to give you a perspective on the major different aspects and the benefits and the major challenges of each system.

Do your research and do what works best for you, what works with your long-term goals and what really stirs your passion.

Michael Dermansky, APAM, has been working in physiotherapy for more than 20 years. He graduated in 1988 with a Bachelor of Physiotherapy and has studied a Graduate Diploma in Nutrition, Master of Business Administration and a Graduate Certificate in Physiotherapy (Continence and Pelvic Floor Rehabilitation). Michael founded MD Health in 2002.