Let’s start by saying that the greatest reward for a physical therapist in private practice is the independence and freedom that comes with doing things our way.
If you are simply wanting to make a lot of money, physical therapy might not be the best way. There are plenty of other ways to get rich.
But for most therapists, money is not the end-all. Studies show, that the main reasons why we chose physical/occupational therapy is:
1. To help people.
We find meaning in helping people. We sort of need it actually. It brings more meaning to our lives. More fulfillment. This is very important to us.
2. Spend time with people.
Most physical therapists had the option to go to medical school since it was (and still is) easier to get into but we didn’t go that route because we actually enjoy spending time with people. We are afforded that.
Hastily dispensing drugs is not what we want to do. We truly believe we can fix root causes of ailments. We believe in the whole person natural healing. That’s why we chose physical therapy.
3. We want to have a balanced life.
We enjoy the outdoors, spending time with our kids…we desire a balanced life. The therapy occupation affords us that. We don’t have to make the kind of sacrifices medicine requires. We get to have and more importantly enjoy our family and hobbies (life exercising, fishing, and hiking :).
Given that said, if you want to make the most money you can as a physical/occupational therapist, the best way is through a successful private practice. Notice I said “successful” private practice. If you don’t learn how to do it correctly, you could end up making less than working a simple job–with all the hours, blood, sweat, and tears required.
So, to answer your question of “how much money can you make in private practice”?
1. A successfully run practice (one location) typically generates between $250,000 to $2,500,000 per year in gross revenue with at least 30% of that in profit.
Success is not measured by gross revenue only but by the “take home” (net) percentage as well. In the above stated example of $250,000 gross, the owner is probably working as a solo practitioner and is also on payroll. The 30% profit ($75,000) would be on top of the salary they pay themselves.
On the higher end, the profit would be $750,000 for the year.
So what percentage of all practices are in this category? …only 12%
2. The average private practice (one location) will generate between $120,000 to $780,000 per year in gross revenue with 12-20% of that being profit.
The average practice today wastes money and is not efficiently run. Despite being busy, treating patients, they don’t profit as much. In the example of $780,000 gross, the owner is probably not on payroll and has multiple providers on staff.
The $156,000 in profit (if they net 20%) would be the take home amount in the form of “draws”. But with the amount of time, energy, blood sweat and tears required to run your own business, with employees, $156,000 per year barely covers it. I believe you should make at least $200,000 per year as a private practice owner, or else it may not be worth it.
3. The poorly run practice is simply any practice that is LOSING money (or breaking even). It doesn’t matter how much the gross revenue.
Not much to say if you are not profiting. Believe it or not, there are a good number of practices out there breaking even (or losing money) right now. But know it doesn’t have to be you. If you strive to learn, be prepared, and work hard (in the beginning), you can do extremely well.
This is merely a rough outline (but pretty actual). There are many practices that lie between these levels of course and their gross revenues and profit margins may vary.
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