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How much do I charge?

Setting a reasonable price point for your physiotherapy service is not only one of the most fundamental steps towards starting a private practice, but it's also one of the most difficult as choosing a figure that's both reasonable for you and your clients can be tricky.

Coming up with sensible prices to ensure that your practice's cash flow is not suffering can be difficult depending on your location, your patients and most importantly, your expenses.

When you're transitioning into private practice for the first time, it's important to start by thinking about your pricing from the beginning. The reasons are that your choice of premises, services offered and even location are all aspects that have an impact on your profitability. As a result, setting your prices early means you can ensure that your customers are getting a fair deal and you're also breaking even.

Ultimately, the goal for your physiotherapy practice is that it will become profitable very quickly. However, many people going into business for the first time don't fully understand exactly what profit is as it's easy to neglect your own salary and as a result while you may make a 'profit' you're only really making enough to pay your own way.

Look at expenses with a ballpark figure

Before you start to make speculations based on how much you want to charge patients, the first thing that you should do is take a look at everything that needs paid in the month. Start by giving yourself a salary that's reasonable and remember to include tax and healthcare payments and don't forget paid time off either!

Making a breakdown lets you establish exactly how much you need as a bare minimum. Obviously if you work as a home physiotherapist or a mobile physio, the cost of a lease will be replaced with either gasoline charges or perhaps loan repayments on a building conversion.

With your ballpark figure in mind, you can now take a look at what you need to do in order to reach your 'break even' point. In our case – if we decided to work 30 hours a week (around five hour long sessions six days a week), then we'd have to charge around $40 per hour in order to have a profitable business operating a clinic as a lone practitioner. Obviously, if you were to hire another physiotherapist – the costing would drop significantly. If only it were that simple!

Looking at the market

Before thinking that it's going to be really easy to get enough clients to break even, the first thing you need to do is to evaluate the current market and establish whether or not there is capacity for another private clinic. If you live in a small area, then perhaps you'll only be able to work 10 hours a week at most.

Take a good hard look at the local market and be sure to speak to any professional contacts you may have. If they think that there's not a large enough market for physiotherapy in your local area, you may very well find that you need to move your business to a larger area where chasing profits will be easier.

Also take a look at any additional markets that you may be able to access. Perhaps you have contacts in the insurance industry that can make referrals or even the local hospital / health authority who need a private physiotherapist. You'd be amazed at just how many fund private referrals.

Looking at the competition

Another good indicator is to take a look at the local competition and see exactly what they're offering and what they're charging. As a general rule, your rates will be similar to the competition, not too much higher, and not all that lower either. Profits there to be taken, and there's no point in throwing it away!

Develop a realistic pricing strategy

Ultimately, your rates will be based on your operating costs, your patients and also just how much profit you need to make. Many people think that when they open a clinic they need to undervalue their services. The fact is that if you put a low price on your service, potential patients may be reluctant to use it because when it comes to healthcare, many people want to pay 'more' to ensure good service.

If you want to ensure patients come back – a good pricing strategy includes creating discounts for additional visits, having promotions for blocks of treatments and also being able to sell equipment such as resistive bands and the likes. The secret is not so much how much you need to charge to attract customers, but how much to charge in order to keep them coming back for more.

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