How Much Does It Cost to Open a Physical Therapy Business?

You need a minimum of $398,900 to open a medium-scale physical therapy clinic in any city in the United States of America. Note that this amount includes the salaries of all the staff for the first three months of operation.

Physical therapy (PT) which is also known as physiotherapy, is one of the allied health professions that, by using evidence-based kinesiology, electrotherapy, shockwave modality, exercise prescription,

Joint mobilization and health education, treats conditions such as chronic or acute pain, soft tissue injuries, cartilage damage, arthritis, gait disorders and physical impairments typically of musculoskeletal, cardiopulmonary, neurological and endocrinological origins.

Physical therapy is used to improve a patient’s physical functions through physical examination, diagnosis, prognosis, physical intervention, rehabilitation and patient education. It is practiced by physical therapists (known as physiotherapists in many countries).

Estimated Cost Breakdown to Build a Physical Therapy Business

In setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by leasing or acquiring your own facility, then you need a good amount of capital as you need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers to be creative and productive.

The tools and equipment that will be used are nearly the same cost everywhere, and any difference in prices would be minimal and can be overlooked. 

As for the detailed cost analysis for starting a physical therapy business; it might differ in other countries due to the value of their money. These are the key areas where you are expected to spend your startup capital on;

1. The total fee for registering the business in the United States of America – $750.
2. Legal expenses for obtaining licenses and permits as well as the accounting services (animation software, P.O.S machines and other software) – $3,300.
3. Marketing promotion expenses for the grand opening of the physical therapy clinic in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
4. The total cost for hiring a business consultant including writing a business plan – $2,500.
5. The total cost for the purchase of insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
6. The cost for renting or leasing an office facility (clinic facility) and that can accommodate the number of customers per time (Re – construction of the facility inclusive) will cost – $80,000.
7. Other start-up expenses including, commercial satellite TV subscriptions, stationery ($500) and phone and utility deposits ($2,800).
8. Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $40,000
9. The cost for start-up inventory (stocking with a wide range of therapeutic (massage) oil, and other medical supplies) – $15,000
10. The cost for store equipment (cash register, security, ventilation, signage) – $4,750
11. The cost of purchase and installation of CCTVs: $2,000
12. The cost for equipping the physical therapy clinic (NordicTrack system, Treatment Tables, Therapeutic ultrasound equipment, Isokinetic devices, Electrical Muscle Stimulation, Exercise Bike and Exercise Balls, Internet Server, Flat Screen TVs, sound system, DVD players, Satellite dish and decoder, furniture (table, stools and sofas), telephones, filing cabinets) will cost – $180,000
13. The cost of launching a website: $600
14. Miscellaneous: $2,000

From the rough estimate as listed above, you would need a minimum of three hundred and ninety-eight thousand nine hundred USD ($398,900) to establish a medium-scale but standard physical therapy clinic in any city in the United States of America.

Note that this amount includes the salaries of all the staff for the first three months of operation. When it comes to opening a physical therapy business, there are certain factors that can influence the overall cost.

Factors That Influence the Cost of Opening a Physical Therapy Business

1. Licensing and Permits

If you are considering starting a physical therapy business in the United States of America or in any country of the world, you are expected to spend money in obtaining all the needed licenses and permits such as a:

Business license, State Physical Therapy License, Healthcare Facility License, Federal Employer Identification Number (EIN), Accreditation and Medicare/Medicaid Provider Enrollment, Building Permit, and Zoning and Land Use Permit.

Note that the costs associated with obtaining the necessary licenses and permits to operate a physical therapy business can vary from one city or state to another.

The amount it will cost you to obtain the needed licenses and permits in the United States of America will be different from what it will cost you to obtain the same permits and licenses in Canada or any other country.

2. The Cost of Purchasing Physical Therapy Equipment and Supplies

Physical therapy equipment and supplies are a key aspect of your business. In essence, if you are planning to start a physical therapy business, then you should have a budget to purchase equipment and supplies such as:

Treatment tables, rehabilitation exercise equipment, ultrasound machines, electrotherapy devices, treadmills, stationary bicycles, parallel bars, hot and cold therapy units, resistance bands and weights, and whirlpool baths.

Supplies such as treatment modalities (e.g., heat and cold packs), treatment lotions and gels, examination gloves, treatment towels and linens, resistance bands and tubing, etc.

3. The Location Where You Want to Start the Business

Different cities require different budgets to run a business even if the business is the same. For instance, if you have plans to start your physical therapy business in Los Angeles, California, then you must be ready to spend far more than is required to start the same business in Albuquerque, New Mexico.

This is so because Los Angeles, California is one of the most expensive cities in the United States, and Albuquerque, New Mexico is among the least expensive cities in the United States of America.

4. The Cost of Marketing and Advertising

Establishing a strong online presence, creating a website, developing marketing materials, and advertising your physical therapy business and services offering will attract reasonable expenses.

In essence, you should have a budget that will take care of your business website design, online marketing campaigns, printed materials, and business cards.

Depending on how big you want to announce your presence in the market, you should have a budget estimate that is reasonable enough to take care of all aspects of marketing and advertising of your new physical therapy business.

5. The Cost of Purchasing Insurance Policy Covers

In order to protect your business and clients, you will need insurance coverage, such as general liability insurance, health insurance, and professional liability insurance.

Trust me, the amount you will spend in purchasing insurance coverage for your physical therapy business can be significant and will influence the overall cost of starting the business.

Note that the costs of purchasing insurance policy coverage for your physical therapy business will depend on your location and the coverage options you choose. But generally, you should have a budget estimate of $1,000 to $3,000 per year for your physical therapy business insurance.

6. Staffing Cost

If you plan to start a standard physical therapy business, then you should plan to hire a Physical Therapist (PT), Physical Therapist Assistant (PTA), Administrative Assistant, Front Desk Receptionist, Billing Specialist, Office Manager,

Rehabilitation Aide, Marketing Coordinator, Insurance Coordinator, and Maintenance and Cleaning Staff. Please note that their salaries, benefits, and training costs will form a large percentage of your budget.

Note that your staffing expenses will vary because it will depend on the number of staff you want to hire and their qualifications.

But generally, you should have a reasonable budget estimate that can cover this cost because it varies based on staff size and salaries.

7. Operational Costs or Ongoing Expenses

Although, there is no fixed amount you are expected to spend when it comes to operational costs, but the truth is that it can be a significant part of your budget especially if you are going to be operating a standard physical therapy business with a handful of employees.

Note that your operation costs include ongoing expenses such as office supplies, utilities, transportation costs, and maintenance expenses for your equipment and tools.

We cannot give an estimate of what you should budget for your operational costs because it will vary based on your business size and the volume of patients you handle.

In Conclusion,

Note that this is a rough estimate and we usually advise our readers who are interested in opening a physical therapy clinic to go to the market or directly contact wholesalers and suppliers of the major equipment such as NordicTrack system, Treatment Tables, Therapeutic ultrasound equipment, Isokinetic devices,

Electrical Muscle Stimulation, Exercise Bike and Exercise Balls et al, and related gadgets they want to have in their physical therapy clinic in order to get the real time prices of these items. The truth is that, if you are a good bargainer, you can get a better deal that will help you beat down the estimated price as listed above.