There is a fairly common question/concern I’ve been hearing from those considering cash-pay services or completely converting to or starting a Cash-based PT practice: “Is a Cash practice even a viable option in my city?” In other words, “If I do this, will there be enough people with the means and willingness to pay out of pocket for my services, or will I find out that this model just isn’t feasible in my area?” Something to keep in mind is that the above question stems from the more primary question “Will I be successful in a Cash-based practice?” The answer to this obviously goes far beyond the location of your clinic and demographics of your city. Even so, these things do need to be evaluated .. with some important things kept in mind along the way.

As you research demographic information about your city, you need to ask the question, “what is this information really telling me?”  www.city-data.com has pretty extensive demographic information on most cities, but I sure am glad I didn’t review it before I started my Cash practice in Austin TX. When you use this or similar websites, here are some things to keep in mind:

  1. You are looking at averages. According to city-data.com the average household income in Austin TX was only $50,132 (in 2009). Not a number you would imagine provides a great deal of leeway in the budget for $120/hour PT treatments. Even with those stats, my schedule stays full, and the same is the case for other Cash-based PTs in the greater Austin area. Guess the median household income for New York City … according to city-data.com, it was $50,033 in 2009. I can guarantee you that New York City can (and probably does) support many cash-based practices. As I explain in my post You may be surprised at who is willing to pay out-of-pocket for your services, your patients won’t necessarily all be wealthy, but the majority of your cash-paying patients will likely come from the upper half of the income spectrum in your area. So don’t put too much weight in the averages you see online.
  2. The areas you consider to be your city may technically be different cities altogether. When people ask me where in Austin my practice is located, I answer “Westlake.” According to City-Data.com Westlake Hills and other similar areas are listed as separate cities even though most people consider them “part of Austin” (look for the list of “nearest cities” when reviewing your city at City-data.com). The average household income for Westlake is $156,017. Quite a difference! Even so, the majority of my patients live within what city-data.com considers to be “Austin.” So, again, it’s not only about how many wealthy families there are in your immediate area.

Location Considerations

If you don’t already have an established practice or will be choosing a new location, finding something in the more affluent areas of town is of course preferable. Since many of your patients will living in these areas, it makes sense to be located as conveniently as possible. I also think people will be less likely to pay cash for PT in a not-so-nice area, or in a complex/building that isn’t attractive. Most of your patients will also tend to be people that place a higher-than-average value on their time. For all these reasons, being located in the nicer and more affluent areas of town makes sense, even if you have to pay a little extra for it. With all that said, people who are willing to pay out of pocket also tend to be those who are willing to travel a distance if it means getting the best treatment and results. Therefore, if you’re not already located in an affluent area, or can’t get set up in one, it doesn’t mean your Cash-based practice plans are dead in the water.

Trends in your area – targeted marketing to specific groups can very quickly build a following.

Is the population in your area generally active? If so, this will be a big positive in your ability to make a Cash practice work. However, if the answer to that question is “no,” that doesn’t mean that active parts of the population do not exist. Do some searches for running clubs, gyms, golf courses, athletic meetup.com groups, youth sports, high school sports, etc in your area. You will get an idea of how much opportunity there is for targeted marketing to the population subsections that will fill your clinic. Check out this post for a just a few of the many niche markets you can target as a fee-for-service Physical Therapy clinic.

If it isn’t already clear, I truly believe that successful Cash-based PT practices are possible in most non-rural areas (and probably many of those as well). In weighing whether or not you can succeed in this model, I think a much more important question is this: “Can I find and market effectively enough to those in my city who are willing to pay cash for my services?” For this reason, over half of my eBook is dedicated to doing exactly that.

So of course you need to do your market research, but consider the sources of the information and the true meaning of what you are analyzing. Just because your “city” has a population of 50K with a median income of less than $45K, doesn’t mean there aren’t plenty of people in the greater area willing to pay out of pocket for high-quality health care. No doubt some cities will be more supportive of Cash practices than others, but did you imagine Austin Texas would house a number of these practices? Demographics can be important to a point, but it’s much more about finding and engaging the groups in your area who place a high value on health, wellness, and optimal functioning.

Click Here to learn how to start your own Cash-Based Practice

 

 

 

 

The information contained in this website is for informational purposes only. I am not a lawyer or an accountant. Any legal, financial, or business advice that I give is my opinion based on my own experience. You should always seek the advice of a professional before acting on something that I have published or recommended. Any amount of earnings disclosed in this guide should not be considered average. Please understand that there are some links contained in this guide that I may benefit from financially. The material in this guide may include information, products or services by third parties. Third Party Materials comprise of the products and opinions expressed by their owners. As such, I do not assume responsibility or liability for any Third Party material or opinions. The publication of such Third Party Materials does not constitute my guarantee of any information, instruction, opinion, products or services contained within the Third Party Material. The use of recommended Third Party Material does not guarantee any success and or earnings related to you or your business. Publication of such Third Party Material is simply a recommendation and an expression of my own opinion of that material. No part of this website shall be reproduced, transmitted, or sold in whole or in part in any form, without the prior written consent of the author. Users of this website are advised to do their own due diligence when it comes to making business decisions and all information, products, services that have been provided should be independently verified by your own qualified professionals. By reading this website, you agree that myself and my company is not responsible for the success or failure of your business decisions relating to any information presented here.

The information contained in this website is for informational purposes only. I am not a lawyer or an accountant. Any legal, financial, or
business advice that I give is my opinion based on my own experience. You should always seek the advice of a professional before acting
on something that I have published or recommended. Any amount of earnings disclosed in this guide should not be considered average.
Please understand that there are some links contained in this guide that I may benefit from financially. The material in this guide may include
information, products or services by third parties. Third Party Materials comprise of the products and opinions expressed by their owners. As
such, I do not assume responsibility or liability for any Third Party material or opinions. The publication of such Third Party Materials does not
constitute my guarantee of any information, instruction, opinion, products or services contained within the Third Party Material. The use of
recommended Third Party Material does not guarantee any success and or earnings related to you or your business. Publication of such Third
Party Material is simply a recommendation and an expression of my own opinion of that material. No part of this website shall be reproduced,
transmitted, or sold in whole or in part in any form, without the prior written consent of the author. Users of this website are advised to do
their own due diligence when it comes to making business decisions and all information, products, services that have been provided should be
independently verified by your own qualified professionals. By reading this website, you agree that myself and my company is not responsible
for the success or failure of your business decisions relating to any information presented here.

© 2011 Dr. Jarod Carter | Home | About Dr. Carter | E-Book | Contact Us | E-Book Newsletter

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