Starting a cash-based physical therapy practice is an exciting and rewarding journey, but it can also feel overwhelming. One of the biggest concerns many new practice owners have is how to minimize their risk. From legal protections to insurance, there’s a lot to consider when starting your own business. In this blog post, we’ll break down the basics of business formation, liability insurance, and how you can protect both your personal and business assets while launching your practice.
Business Formation: LLC or S-Corp?
Why Do You Need a Business Entity?
When you’re starting your cash physical therapy practice, it’s essential to decide on the right business entity. Many new business owners stress about this decision, worrying about the complexity and cost involved. However, the truth is, setting up a business entity like an LLC or S-Corp is simpler and more affordable than most people realize.
LLC (Limited Liability Company): An LLC is the most common entity choice for small business owners. It helps protect your personal assets in case of lawsuits or debts incurred by the business. While you may not need an LLC if you’re starting out and don’t have substantial assets, it’s still a good idea for peace of mind.
S-Corp: If you expect to make more than $60,000 to $80,000 in profit each year, an S-Corp might be a better option for you. S-Corps offer tax advantages as your business grows, allowing you to save on self-employment taxes. However, managing an S-Corp can be more complicated than an LLC, so be sure to consult a tax advisor if you’re considering this route.
One of the best things about setting up a business entity is that you don’t need a formal business plan or even to be fully operational before getting started. You can file for an LLC or S-Corp quickly—within 72 hours—and begin networking and marketing your practice right away.
Liability Insurance: Protecting Your Business
Once you’ve decided on your business formation, the next step is securing liability insurance to protect yourself and your business. There are two main types of liability insurance you’ll need:
General Liability Insurance: This protects your business if a client were to get injured at your facility. For example, if a patient trips over something in your clinic and breaks their wrist, general liability insurance would cover that incident.
Professional Liability Insurance: Also known as malpractice insurance, this protects you if a patient alleges that your care caused them harm. This could be for any professional mistakes or negligence claims. It’s crucial for physical therapists to have professional liability insurance to protect their license and livelihood.
In many cases, you can get both types of insurance for a few hundred dollars, and they will protect both your personal assets and your business. While it’s important to have the right coverage, starting your practice without these insurances doesn’t need to be complicated or time-consuming.
The Reality: Starting is Easier Than You Think
One of the most significant hurdles people face when starting a cash-based practice is the fear of doing it wrong. It’s easy to get overwhelmed by the legal and financial aspects, but the truth is, setting up your LLC and obtaining liability insurance is much simpler than most people realize.
You don’t need months of preparation or a large investment upfront. You just need the right mindset, the willingness to take action, and a few simple steps:
- File for your LLC or S-Corp (which can be done in 72 hours).
- Secure your general and professional liability insurance.
- Begin networking and building anticipation for your practice.
You don’t need to wait until everything is perfect. Start now, and as you grow your business, you’ll continue to learn and adapt. Many successful cash practice owners started without all their ducks in a row, but they took the leap and committed to growing their practice.
Get Started Today
You can minimize the risk of starting a cash-based physical therapy practice by simply focusing on the basics: business formation and insurance. Once these are in place, the path to building a successful practice is all about networking, marketing, and delivering exceptional patient care.
Remember, launching your practice doesn’t have to be a lengthy, complicated process. By following the steps outlined in this blog, you can get your business up and running quickly, without overthinking the legal and financial hurdles.
Start today, build your network, and focus on providing value to your community. The sooner you start, the sooner you can begin seeing the rewards of your hard work.
Conclusion
If you’re ready to take the next step in launching your cash physical therapy practice, don’t wait! Get your LLC, protect your assets, and begin networking with your community. The process is easier than you think, and the rewards are limitless.
Share this blog with a fellow physical therapist who’s ready to take control of their career and start their own practice!
Watch and Listen to the Full Video
For a deeper dive into a cash physical therapists’ journeys, make sure to listen to the full video. Legal Essentials for New PTs: How to Securely Launch Your Cash Practice
About Author:
Although the company eventually failed, it provided Jordan with invaluable learning experiences. He became passionate about designing world-class patient experiences and building efficient marketing & sales funnels for cash physical therapists. Utilizing this expertise, Jordan became the CMO of a well-known physical therapy media company, and consulted for and built marketing funnels for some of the top physical therapy business coaches.
Eventually growing tired of the typical agency and consulting grind, Jordan, alongside Max Zirbel, founded Clinical Marketer. They infused it with the hands-on support and mentorship that they benefited from in their initial venture. The company was a success from the start, aiding clinics in scaling to 6 and 7 figures in revenue. During its first launch, Jordan and his team met Dr. Ben Bagge, whom they later partnered with after helping him grow his business from $200K/year to over $1M/year in three years.
