November 2002

Private Practice

By Janet Opila-Lehman, MS, OTR, LMT

Starting a private practice conjures up images of hanging your shingle on an office door and handing out business cards. However, you need to do extensive planning before you publicly announce your new business. A careful assessment of your own skills and interests, along with an evaluation of your potential market, leads to solid decisions for your practice. Listening to your heart helps identify your values and emotions that will provide the energy for your business. Your mind provides the intellectual stamina to convert your energy into achievable goals. Soliciting advice from others helps you properly coordinate your goals. All of these will help transform you into a successful private practitioner.

LISTENING TO YOUR HEART

Perhaps you have yearned for a private practice for a number of years, or an opportunity has recently opened for a new business. Whether an old or new passion, first listening to your heart, rather than your head, will help determine the intensity and determination behind your ideas.

A common mistake that therapists make when starting a practice is to start taking referrals because the business is there. In the short run, this strategy can be a great ego-builder, but in the long run, it can mean that the business runs the therapist. This pitfall can be avoided by stepping back from your immediate situation and developing a master plan. Pick up a pen and see if your heart can lead you toward a sustainable livelihood. Canfield, Hansen, and Hewitt in The Power of Focus¹ provide some thought-provoking questions:

1. What do I want to do in life?
2. What do I want to have?
3. Where do I want to go?
4. What contribution do I want to make?
5. What do I want to become?
6. What do I want to learn?
7. Who do I want to spend my time with?
8. How much do I want to earn, save, and invest?
9. How much time do I want off for fun?
10. What will I do to create optimum health?

Let your imagination run wild with these questions and come up with 101 goals for your master plan. Choose some goals in the areas of career and business, financial, fun, health and fitness, relationships, contributions, and personal to create a balanced lifestyle. After establishing your list, go back and write a number beside each goal—1, 3, 5, or 10 for the number of years you hope it will take to achieve the goal. Some goals might be: open a private practice in pediatrics, 1 year; improve fitness and nutritional habits, 1 year; become certified in a specific treatment approach, 3 years; or invest 10% of earnings in a retirement fund, 10 years.

Now the soul-searching begins as you clarify your reasons for these goals. In his book, The On-Purpose Person, Kevin McCarthy² provides an excellent technique to prioritize goals, called the tournament draw. Look at your list of 1-year goals and pick out the top three that draw your attention. For each goal, list down the left side of the paper all the reasons why you want to achieve this goal. This is the preliminary draw. Now decide which ones move into the next round. Repeat this process until you end up with your single highest value or feeling. Follow your gut instinct. This is the passion and energy that will fire your private practice—through good times and bad (see Table 1).

The important point is to understand the main reason(s) behind your goals. These reasons will influence decisions such as where you spend your advertising dollar, where you locate your practice, and what type of business you establish.

DON’T FORGET YOUR MIND

Now that you have assessed the reasons for your passion, it is time to apply your critical thinking skills. In 25 words or less, articulate a name for the practice you want to establish and what services or products you will provide. Your “one-liner” should also include the intended audience or market for your business. Some examples include:

• Safe Work Environments. Providing consultation and equipment modifications in industrial settings—Mary Smith, PT
• Conferences To Grow On Inc. Continuing education opportunities for rehabilitation professionals—John Davis, EdD, MSW

Begin talking to your friends, colleagues, and clients about your business idea. See what their reaction is and ask them if they can visualize you in this new role. Visit other clinics, businesses, and organizations that are offering similar services or products. This technique of benchmarking is commonly used by business leaders to improve their operations or increase their sales. Benchmarking allows you the opportunity to see ideas in practice and learn from the experience of other rehabilitation professionals.³

As you listen to the ideas in your mind, you should complete an analysis of your strengths and weaknesses. What tasks of the business do you really look forward to? Do you have the education and training that are expected of your profession? Do you need other certifications and/or licenses? What is your business background? What is your family situation? Do you have a strong support system? How much time do you anticipate giving to this business? Do you like to network? Are you a presenter or a behind-the-scenes worker? A variety of self-assessment tools are available to help you in this process.⁴

SOLICITING ADVICE FROM OTHERS

As you move into the nuts and bolts of starting a private practice, you will undoubtedly need the advice and wisdom of a variety of other people. The following list includes the main areas that you need to research, but do not hesitate to add the expertise of other professionals as they relate to your specific business. The key areas to assess when choosing your advisors are knowledge and expertise, experience, service, creativity, communication, compatibility, and fees.

Audience. Researching your potential audience or client base is probably the most important and the most time-consuming step of starting a business. Who exactly are your clients and where will you find them? A market assessment will examine the geographic area for your services/products, the needs of your potential clients, and local competitors.

The demographic information can be obtained through your local Chamber of Commerce and the Federal Census Report (www.census.gov). The client information can be obtained through a variety of sources such as rehabilitation centers, schools, suppliers, doctor’s offices, and insurance companies. The competitors can be tactfully interviewed and, if approached in a nonthreatening manner, will be wonderful allies in your growth. For example, if the Safe Work Environments business is hoping to serve industrial workers with repetitive and work-related injuries, this business owner will need to gather data on the employment statistics in her area and number of injuries per year and compare these figures to the available services in the area.

Legal Representation. An attorney will provide you with valuable information on setting up the legal form of your operation. Check with the National Health Lawyers Association (www.legalstuff.com) for an experienced health care attorney. Your business may be set up as a sole proprietorship where you own and operate the business. With this type of operation, you work under a DBA (doing business as) and you are liable for all debts.

A business may be a general partnership, which is a legal entity of two or more people; the personal assets of the partners are not protected against creditors or lawsuits.

In a C-corporation or an S-corporation, the shareholders own the business and officers run the business. The S-corporation is limited to 70 shareholders and the earnings flow through to the shareholders.⁵

My own business, Wellness GIFTS, is a 501(c)(3) nonprofit organization, which has tax-exempt status for donations and grants. It contracts with private practitioners and independent contractors for services.

An attorney will provide information on contracts, lease/rent agreements, establishing employee policies and benefits, other business transactions, and disputes or lawsuits.

Finances. An accountant with experience in the rehabilitation field will be a tremendous asset to your business. A certified public accountant (CPA) will help you determine the financial feasibility of your business, obtain financing, choose methods of accounting and bookkeeping, determine cash flow, evaluate the tax consequences of various decisions, cut costs, and computerize your practice. A CPA can provide financial statements, projected profit and loss reports, balance sheets, and budgets that are essential for your practice. A CPA can provide you not only with financial wisdom, but general business advice. Your CPA should be your top business advisor.⁶

Marketing and Public Relations. An experienced marketing consultant can bring exciting dimensions of professionalism to your practice. Look for an individual with health care knowledge who is accredited by the Public Relations Society of America (www.prsa.org) or the International Association of Business Communicators (www.iabc.com). This person(s) can assist with logo development, signage, Yellow Pages listings, newspaper advertisements, brochure development, radio advertisements, Web site development, networking, and presentations.

Initially, many businesses cannot justify the cost of hiring a marketing consultant. Other options might include assigning the above tasks to the person in your business with the best writing, spelling, speaking, and interpersonal skills. Or a local university or college may have marketing students who are looking for projects that would coincide with your business needs.

Table 1. Using the following scenario, this individual is motivated by a strong sense of contributing to society, a need for high quality, and a quantity of energy. Keeping your “high draws” in mind, see if your business idea is a match with your personal values.

Personnel. A personnel advisor may be a combination of the above individuals or a separate person with employee expertise. Though you may not be looking to initially hire or contract with other professionals, this advisor will help establish policies and procedures, documentation and billing systems, and scheduling. When you are ready to expand, this person will provide key information about independent contracting versus hiring employees.

Architect/Compliance Officers. Finding the ideal location for your practice is an exciting step of developing a business. Your vision is actually going to become a reality with therapy equipment and space! An architect will be instrumental in construction/renovations and compliance officers will provide information on building codes, zoning issues, and licensing requirements.

Suppliers. The suppliers of rehabilitation equipment are excellent resources for providing information about current trends and success and failures within your business arena. Be sure to attend the trade shows in your field and establish a first name relationship with these invaluable people.

Insurance Representatives. With the present complexity of our medical system, an insurance advisor is an essential person on your advisory team. Talk with other rehabilitation professionals who are using the same systems that you are considering such as Medicare, Medicaid, Blue Cross Blue Shield, workers’ compensation, no fault, managed care panels, and private pay. Attend workshops, read bulletins and newsletters, and check into your professional organizations for support services. The more you know about insurance before you start your practice the better, but be prepared to spend hours navigating the world of reimbursement.

PULLING IT ALL TOGETHER—THE BUSINESS PLAN

Preparing and adhering to a business plan enhances the chances that your new venture will be a success. You would never think of treating a client without first doing an evaluation and then developing the treatment plan. Think of the business plan as the treatment plan for your practice! This plan will serve as a reality check as you investigate the details of starting your business. It may reveal new opportunities on the operational side of your business. The plan will be a statement of intent to others such as investors, bankers, partners, and suppliers.⁷

A multitude of resources exist to help you through the stages of writing a business plan. Review the business section of any major bookstore for books, software programs, or videos. The Internet is a haven for business ideas and plans; just type in “starting a private practice” and cruise. Take a class at a local university, business school, or the US Small Business Administration (www.sba.gov). Find your local chapter of the Service Core of Retired Executives (www.score.org), which offers free consulting services to business owners. Join a community business organization such as the Rotary Club, Business and Professional Women, or Chamber of Commerce and talk with experienced professionals. Spend time with an entrepreneur or business person whom you admire.

The main areas that are typically included in a business plan are as follows:

1. Executive summary: a brief abstract that explains the purpose and value of the business.
2. Description of the business: details on what your business is, how you are going to run it, and why you think it will be successful.
3. Organization plan: organization chart, legal structure.
4. Personnel: presentation of staff and personnel.
5. Market analysis and plan: target market, competitors, your uniqueness, pricing.
6. Financial information: capital requirements, cash flow, break-even analysis, payback period, funding.
7. Supporting documents: any further information that supports your business such as personal financial statements, letters of reference, leases, contracts, and legal documents.

Starting a private practice is a multifaceted, exciting experience. At some point the moment will come when you must say to yourself, “Just do it!” Leap into your practice with both feet and follow the passion of your heart. Good luck! ®

REFERENCES

1. Canfield J, Hansen MV, Hewitt L. The Power of Focus: How to Hit Your Business, Personal and Financial Targets with Absolute Certainty. Deerfield Beach, Fla: Health Communications Inc; 2000.
2. McCarthy K. The On-Purpose Person: Making Your Life Make Sense: A Modern Parable. Colorado Springs, Colo: NavPress; 1992.
3. Whiteley RD. Love the Work You’re With: Find the Job You Always Wanted Without Leaving the One You Have. New York: Henry Holt; 2001.
4. Krolikowski N. Starting a business: self-appraisal and planning. OT Practice. 2002;7(14):insert.
5. Angel M, Davis T, Hofer I. Plan Your Business. 5th ed. Kalamazoo, Mich: Michigan Small Business Development Center; 2001.
6. Hertfelder SD, Crispen C, eds. Private Practice: Strategies for Success. Bethesda, Md: American Occupational Therapy Association Inc; 1990.
7. Allen K. Entrepreneurship for Dummies. New York: IDG Books Worldwide; 2001.

Janet Opila-Lehman, MS, OTR, LMT, owns a private practice, Wellness Works, which offers therapy services and wellness classes in Bath, NY. She is the founder and chairperson of Wellness GIFTS (Giving Inspiration for the Soul), a nonprofit organization that offers camping retreats and respite to families with members who have disabilities. She can be reached at: cheers@linkny.com.

LOOKING FOR EXPERT ADVICE? Experts here are available to answer all your questions! Please contact us for more information about this feature, or to become an expert.

MEDIA CENTER Interactive Media  Archives  · December 2008  · November 2008  · October 2008  · August/September 2008  · Fall 2008 Product Directory  · July 2008  · June 2008  · May 2008  · April 2008  · March 2008  · All Archives  Newsletter  · Rehab Today Resources Classifieds Calendar Consumer Resources Media Kit Advertiser Index EAB Reprints Submit an Article