The OT Private Practice One Page Business Plan
For occupational therapists starting a private pay practice the secret to getting started is to do LESS, not more. There's no better place than making sure your business plan is simple. In fact, it should fit all on 1 page and contain just 5 critical elements.
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Starting an OT Private Pay Practice is more than just being a great therapist. Through years of experience, we've distilled the essence of a thriving practice into 5 crucial elements. These aren't complex strategies or additional qualifications; they're about leveraging your innate skills as an OT. By understanding and implementing these elements, you can set the foundation for a profitable and fulfilling practice.
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Transcript of Video:
Hi, I'm Doug Vestal with Freedom of Practice and together with my wife, Lindsey, we help other aspiring OTs start and grow their very own private pay practice.
Now you may be thinking about starting your own private pay practice, and you may be intimidated by this concept of developing a business plan. You hear these terms thrown around a lot in the media, that every successful business has a really detailed and complicated business plan.
Now I'm here to tell you don't need anything complex. In fact, the more simple you can make it, the greater the odds of your success. Always remember what Tony Robbins said, which is complexity is the enemy of execution. In fact, when Lindsey and I started The Functional Pelvis, our own private pay practice in 2014, our business plan was written on the back of a Chick-fil-A napkin. And let me tell you that business plan served us for at least the first year.
So you don't need anything really complicated. And in fact, the more complicated you make it, the less likely you're going to be to execute on it.
So one of my favorite books is this book right here by Steven Pressfield, it's called the War of Art. And in it, he details this concept called resistance. So think about the writer who never writes, the artist who never paints, and the aspiring business owner, who never starts their business. All of this self sabotage, all of this waiting to start tomorrow.
That is the siren call of resistance and we all face it. So the more complicated you make it in the beginning, the less likelihood of you actually following through on it.
So that's why we recommend really just having a one page business plan. So let me read you just a quick quote. One of my favorite quotes from this book, which is on resistance and procrastination.
And in this book, he says, procrastination is the most common manifestation of resistance because it's the easiest to rationalize. “We don't tell ourselves I'm never going to write my symphony. Instead we say, I'm going to write my symphony. I'm just going to start tomorrow.” And the same can be true about private pay practice. You may have this great desire to start a private pay practice. And you say, I'm, it's not that I'm not going to start. I'm just going to start tomorrow. And then many people start to develop very complicated business plans to support this goal of starting tomorrow. Well, what Lindsey and I always recommend is let's start now.
We don't know what tomorrow's going to bring. Let's take something that's really complex and make it really, really simple because the fact of the matter is you really only need five different elements to your business plan.
So you need to know how much you're going to charge and what your revenue goals are and understanding of the relationship between your rate, your revenue goals and what that actually means for you in terms of your schedule.
See, this is a part that most people really don't spend much time on. And so they can create a business where they have to work a hundred hours a week for themselves instead of working 40 hours a week for someone else. So that linkage between your rate, your revenue goals and what that means for you as the business owner for your schedule is incredibly important.
The next thing you need to know is what happens if your goals aren't met. So, you know, you don't want to always anticipate the worst case scenario, but let's face it many times we don't necessarily achieve the ideal state of our goals.
And part of understanding the risk of the business is making sure that you can stay in the game long enough to survive and thrive. So we want to know what happens if we don't meet our goals, will we still be able to sustain ourselves next? We really need to look at our schedule and understand what this means for our detailed week.
When are we going to schedule the activities that bring clients in? Because we can't have a situation where our revenue goals are only possible if we are seeing clients eight hours a day, 10 hours a day. That is the fast route to burnout. And furthermore, you're not going to be able to sustain bringing in new clients which are needed into your business.
And then the last thing you need to know, or what are the core activities you're going to be doing on a weekly, biweekly, and monthly basis to support this business. So, like I mentioned, we did it on the back of a Chick-fil-A napkin.
I've recreated it into this one pager again, we don't want to make anything complex. We really just want insights into what this means. And so what I'm going to do is I'm going to take you through each of these five different categories on this page so that you can see exactly how to replicate this for your own private pay OT business. Let's get started.
All right. So this is the one pager that I've created. I took the one pager that I hand wrote, but to make it really visible for you, I've put it into this slide. We're going to walk through it.
It has these five components that I was talking about. So the revenue goals, the revenue insights, this is what we're going to use to figure out what this means for your schedule, the revenue risk, which is very important, the weekly schedule.
So putting everything down and then the client attraction activities, which is incredibly important. Now, this is what I did for Lindsey. This is what we did together. Yours is going to look different.
Don't pay so much attention to the specific numbers because yours are going to be different. However, look at the tactics, look at the insights that you get as we walk through this.
So the first focus on is the revenue goals. Now we initially wanted to be able to pay Lindsey a hundred thousand dollars to replace about what she was making in a hospital in New York City. And we estimated our business taxes to be around $15,000 and our business expenses to be 10,000. Your business expenses are probably going to likely be very different.
Ours were on the lower end because we weren't renting real estate. She was seeing people in their homes. So a lot of the expenses were lower than if you were maybe seeing people in a physical location that you were either renting or owning.
So with these three, we had a revenue goal of 125,000. That revenue goal would ensure that enough money was coming into the business that Lindsey could take the salary that she wanted to. So that was, that was number one.
Then after that, we had to ask ourself, what would it mean and what would reality look like if those things were true and that's where the revenue insights come in.
So the revenue insights tell us what is the state of the world that's going to get us to that level of revenue. And the first thing is we needed to find what the cost per session was going to be and the cost for an average of six sessions, which was about the average length of a plan of care.
So now she started it around 200, eventually it grew to about 450 for 90 minutes and 350 for a 60 minute session. We get a lot of questions around pricing of services. In our course, private pay MBA. We go through a whole module around how to price and how to get confidence in pricing your services.
For this planning, we were assuming $200 per client visit. So the number one question that we wanted to ask ourselves was how many clients would it take to actually reach this revenue goal? Was it even realistic from the very beginning?
So what we did was we said, well, if we have a revenue goal of 125,000 and on average, each client is paying us over the course of the six visits, $1,200. That would mean we only need 104 clients. And that was when a huge light bulb went off for us.
So we didn't need thousands and thousands of clients to reach this revenue goal. We needed just 104 people, and we needed 104 people in New York city where the population's like 10 million.
So once we saw this, we started to get a little bit of confidence that this thing was actually doable.
Because we didn't need 500 people. We didn't need a thousand people. We didn't need 10,000 people. Our world went from being very, very big to actually being very small. And that was incredibly powerful for us.
Of course, we could find 104 people who needed her services and would be willing to pay for it. So that was a huge insight for us. And that's part of the benefit of really knowing your numbers and going through your numbers.
Now, the next thing we did was we then translated this into the number of sessions required and this was also really eye opening. And it's something that is absolutely fundamental to do to make sure that you're building a business and running a business that gives you energy and doesn't always drain energy from you. We want to make 125,000 in the business and one session is going to pay us 200. So if we divide those two, then that averages out to be 624 sessions a year.
That's 624 individual treatments that we would have to provide to a client. And that averages out to only 12 sessions a week. So you take your 500, your 624 and you divide it by 52 and you get on average, you need 12 sessions a week.
That was insight number two for us. So we only needed 104 clients. We felt like we were supremely confident we could find over time, 104 true fans for our business. And we also only needed to see or have 12 sessions a week.
So, Lindsey, wasn't going to have to see 48 clients a week. She wouldn't have to be seeing 80 clients a week to be able to meet her goals.
So 12 sessions a week was actually very doable and anything above 12 sessions, which definitely happened, would mean that she was surpassing her goal. So that was huge.
Now let's talk about revenue risk. So I think it's fundamental to understand some of the risk that are in your business and to understand and make sure that you can still survive. If things don't go to plan doing this type of planning will give you the confidence you need. That no matter what happens with the economy, no matter what happens with your business, you can still survive and you can still thrive.
So we ran two different scenarios. The first right here was, we said, well, let's not be overly optimistic that everyone's going to book six sessions with us. Maybe 50% of the clients book three sessions. So if that happened, what would our numbers look like now?
And would our numbers be such that they could actually sustain us and would we be able to achieve our goals? So if 50% of our clients only book three sessions, and not six, then the average plan of care we would have would change. So the average price that our clients would be paying into the business would be $900. So then we asked ourselves how many clients would we need within the business to still reach our goal of 125,000? So that would be the 125,000 divided by the 900. And again, great number. We only need 139 clients within the business. So that was huge. So even if we were off by 50%, from a booking perspective, it wasn't like our number of clients went from needing 104 people to a thousand people. Something that was going to be insurmountable. No, we just need to find an additional 35 people, which for a city like Manhattan was imminently doable.
The next thing was, we said, well look, what if just our revenue predictions are off by 40%? So what if instead of making the 125,000 coming into the business, what if we only made 60% of that? Right? So our numbers were down 40%.
So 60% of 125,000, that is your 75,000 right here. Now we would still need to take out our business taxes and we would also need to take out our business expenses. So we kept the business expenses the same, and our taxes went down a little bit because the business wouldn't be paying as much on a lower revenue number. Again, these are just estimates. So at that point, the business would be able to pay Lindsay 55,000, not the hundred thousand but 55,000.
And when we looked at these numbers, we said, we asked ourselves, we went back and we said, okay, can we survive on this?
Is this worth the risk? Right? Because every business has a risk. If we were wrong by 40%. And Lindsey just made $55,000 that first year, again, seeing less than 12 people a year, would we be happy with that?
Would that be enough for us to continue to reinvest in the business and grow it over time? And the answer for us was absolutely 100%. This is the right thing to do. We can live with these numbers. Things may be tight, but we can grow into them. So that was huge.
Now the next thing is the weekly schedule. And this is where we take all of those revenue insights. And we plan out what the week is going to look like. So 12 sessions a per week is really only working three days in the clinic seeing four clients each day. So remember we wanted to provide great service for the clients, but we also wanted to have a business that gave us some flexibility, gave us mornings with the kids, evenings with the kids, enable Lindsey to be class parent, enable us to take a day off to go to the museum with the kids if there was a class trip.
So we wanted to make sure our schedule wasn't going to be overloaded from a client perspective, from a marketing perspective. And that's where we designed this, this weekly schedule. So we would carve out Monday, Wednesday, and Friday for seeing the clients.
Those are the three days a week booking four clients each day. There's more time space in here for commuting time because we were seeing people in their home. So we had to account for the fact that we had to get from one location to the other location. If you weren't seeing clients in their home, then this could obviously be shorter. And when someone called, those are the times that are available.
So many times when you're first starting out, it's very common to want to bend over backwards, to not keep to your own ideal schedule, but to work your schedule around what, where, and how the client is available.
But if you think about other practices like dentist, office doctors, any psychologist, anybody else that you call. They just see you when their available. And typically the client works their availability around what you first offer them. So we always recommend set the schedule that works for you and your family. Keep to that. And as people call, just funnel them into the open spots, even though you may have the desire to book them at a time when they say they're only available after six or after 7:00 PM, if you're doing the marketing, right. And if you're positioning the business, right, they will make the time to book for when it's convenient for you. So we kept Monday, Wednesday, and Friday reserved for clients during the day. And then Tuesday and Thursday were reserved for marketing and professional development.
So this marketing and professional development was going to be the activities that brought in new clients. So brought in new clients who are willing to pay out of pocket for services and establish The Functional Pelvis and Lindsey, as the go to practice within New York City for pelvic floor therapy.
Now setting a schedule like this is really important, especially having, having the marketing and professional development on dedicated days.
Too often, people get into this race where they're trying to do social media one minute, they're responding to emails to the next minute. They're trying to work on a workshop an hour after that. And they feel very, very busy, but not necessarily very productive.
And one of my other favorite books is this book Deep Work by Cal Newport. And he goes through how we're living an age of distraction and there's difference between shallow work and deep work.
And his definition of deep work is professional activities performed in a state of distraction, free concentration that push your cognitive capabilities to their limit. These efforts create new value, improve your skill and are hard to replicate. And that's the kind of work you need to be successful in a private pay practice.
He also goes on to say that to succeed, to produce the absolute best stuff you're capable of producing, is a task that requires depth. So having these dedicated days for marketing and professional development will allow you to get into that deep work state and be more productive than you ever thought possible.
So we come to the last set, which is client attraction activities. And here we broke down what are those tasks that we're going to be working on? And we did it from a weekly, biweekly and monthly perspective.
So this is critical. Many people know they should be doing this, but they don't necessarily schedule it. We recommend scheduling it, making it a fixed amount of time, and then just getting it done. So on a weekly basis, we set the goal of meeting four new potential referring parties, creating posting and distributing education based marketing, which is the kind of marketing that we love to do.
Creating community workshops, creating new ones, being the expert in local Facebook groups so that you're attracting people who are want to seek you out. Then on a biweekly basis, giving community workshops, showing up within your community, offering service, offering education as a way to bring in new client clientele. Finally nurture relationships with those referring parties. So you don't want to ghost them. You want to nurture these relationships over time. The people that you have been referring to you, potential new referrals and schedule and maintain that contact with them.
And then on a monthly basis, something that was very valuable was hosting a professional networking group. So this was a combination of other pelvic floor therapists within the community, pre and postnatal yoga instructors, midwives, doulas, everybody who touched different portions of the population that we were serving would come together with Lindsey leading it and discuss clients, discuss the state of the industry. That way they all got to know one another, got to know their strengths. And that in of itself became a very big source of referrals.
Now, yours may look completely different, but the insights that you can get from going through this exercise and keeping it simple now, remember, keep it on just one page, have your revenue goals, the insights that you get from your revenue understand the risk that your revenue faces create your weekly schedule, create your client attraction activities, and you will be set up for success.
And this type of business plan is very achievable. And it's something that we recommend, this one page business plan, every new and aspiring OT business owner do. Okay. So that was the one pager business plan that Lindsay and I had for at least the first year of our business and what we recommend everybody who's looking to start their own private pay practice follow.