E791 | One Lease Hack To Save Thousands

How to Expand Your PT Clinic Without Overspending

Expanding your physical therapy clinic is exciting—it means your business is growing! But it’s also one of the most stressful and expensive phases of business ownership. If done correctly, a build-out can position your clinic for long-term success. If done poorly, it can drain your finances and create major headaches.

With commercial real estate shifting, PT clinic owners now have more negotiation power than ever. Understanding tenant improvements (TI), lease agreements, and build-out options can save you thousands. Here’s what you need to know before signing a lease or breaking ground on renovations.

Why PT Clinics Have More Negotiation Power Than Ever

Many businesses have moved remote, leaving a surplus of available office space. However, physical therapy is an in-person service, making clinic owners high-value tenants for landlords. Why?

✅ PT clinics require long-term leases (stability)
✅ Owners typically have good credit (low-risk)
✅ The business is unlikely to downsize or go remote

Because of this, landlords are offering bigger incentives to lock in PT clinics, including larger TI allowances, lower rents, and better lease terms.

Two Build-Out Approaches: Which One Is Right for You?

When expanding, you typically have two options for managing the build-out:

Option 1: Let the Landlord Handle the Build-Out

Many landlords offer tenant improvement (TI) allowances to cover construction costs. For example, a landlord might provide $120,000 in TI, but in reality, their contractor completes the work for half that price—and they pocket the difference.

✅ Pros:
✔ No need for a loan or large upfront costs
✔ Landlord handles construction, permits, and logistics
✔ Ideal if you don’t have contractor contacts

❌ Cons:
✘ Higher rent since costs are built into lease terms
✘ Less control over design and finishing details
✘ Potential overpricing by the landlord’s contractor

Option 2: Negotiate a Rent Reduction & DIY the Build-Out

Instead of taking the TI allowance, you negotiate a rent reduction and handle the build-out yourself. This is a great option if you have contractor connections or can do some of the work yourself.

✅ Pros:
✔ Lower long-term rent, saving thousands over time
✔ Full control over design, materials, and quality
✔ Can be more cost-efficient if you know a reliable contractor

❌ Cons:
✘ Requires upfront cash or financing
✘ Managing contractors, permits, and timelines can be stressful
✘ More responsibility on you to ensure project completion

Common Lease Mistakes That Cost PT Owners Thousands

1️⃣ Not negotiating TI or rent adjustments—Always ask for higher TI or a lower rent alternative.
2️⃣ Ignoring unfavorable clauses—Some leases have hidden fees, maintenance costs, or unfavorable renewal terms.
3️⃣ Skipping legal review—An attorney should always review your lease before signing.
4️⃣ Not working with a commercial realtor—A good realtor knows how to negotiate on your behalf.

Final Thoughts: How to Expand Without Overpaying

Your first clinic expansion is a huge milestone, but it’s also a complex and high-stakes process. If you’re negotiating a new lease or planning a build-out, don’t do it alone.

✅ Work with professionals—A commercial realtor, attorney, or business advisor can help.
✅ Consider your build-out approach—Decide if TI or rent reduction is best for you.
✅ Plan for long-term costs—Expanding should increase profitability, not create financial stress.

At PT Biz, we help clinic owners negotiate better leases, avoid costly mistakes, and expand profitably. If you’re considering a build-out, book a free call with our team today.

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Podcast Transcript

 Danny: Hey, real quick, if you were serious about starting or growing your cash based practice, I want to formally invite you to go to Facebook and join our PT entrepreneurs Facebook group. This is a group of over 6, 000 providers all over the country, and it's a pretty amazing place to start to get involved in the conversation.

Hope to see you there soon. Hey, are you a physical therapist looking to leverage your skillset in a way that helps you create time and financial freedom for yourself and your family? If so, you're in the right spot. My name is Danny Matta and over the last 15 years, I've done pretty much everything you can in the profession.

I've been a staff PT. I've been an active duty military officer, physical therapist. I've started my own cash practice. I've sold that cash practice. And today, my company, Physical Therapy Biz, has helped over 1, 000 clinicians start, grow, and scale their own cash practices. If this sounds like something you want to do, listen up, because I'm here to help you.

Hey, what's going on? Doc Danny here with PT Outdoor Podcast, and today, we're going to go through a scenario assuming that you have a clinic that you are going to expand, and give you two different options as far as your build out is concerned. So if you're just starting, this is something that hopefully you grow to a point where you're going to be able to do this one day.

If your clinic is growing and you're having to move to a bigger location, that's a good problem to have, but it still can be a very difficult process, a challenging process and something that honestly, it's something that we help people with every single month. We're helping clinicians to look at, we're helping them look at their leases what they should negotiate what type of Build out tenant improvement options that are getting, and I can say for sure we're seeing the clinic owner being a better place for negotiation than I've seen really in the last decade.

So the reason I say that is a lot of businesses are. Not in person or they were in person and now they're more remote so they don't need as much office space And there's a lot of office space available physical therapy is in person for the most part you may do some remote stuff But a lot of what you're gonna do is in person face to face work, right?

So you do need office space and because tenants or because landlords know that tenants like ourselves that are clinicians that are, medical niche in person businesses, they're very valuable tenants. Like you are a very valuable tenant to a landlord. You're low risk. They know you're going to be in person.

They know you're not necessarily going to downsize office space. You're good at repaying debt, right? Like you probably have a pretty good credit score because you take on these amount of loans. All these things point to you're a great tenant because of that. You have a lot more negotiation power than you might even think.

We even just recently had someone that we work with get 120, 000 build out tenant improvement, meaning that the landlord was going to put essentially 120, 000 worth of work into a space. Now I can tell you, whenever I did my build out and we first moved into our space, we got, Basically nothing except for two months of free rent, right?

That was it and we had commercial Realtor negotiating our behalf like the market was just different like the we were lucky to even get in the space that we were in it was such a high demand area and the building they were in didn't have units come up for rent very often. So not a lot of negotiation there, but it's changed.

But if this is the case, you have two options because if you decide that you want to expand and you start to negotiate, you can do one or two things. You can, in this scenario, take what the landlord is going to do at the tenant improvement, and you can say, okay, cool. We'll go ahead and let your team do the build out, they'll manage all of it.

You may have to do some finish stuff. They may not finish exactly like you want. You may have some design stuff you want to add in or something like that. They might do that as well. You'd have to negotiate that in, but that's essentially them taking care of it. And what's going to happen is that landlord.

It usually has a contractor that works for them. And they're able to think of it like they buy wholesale and they sell it to you retail. So for 120, 000 build out retail costs, they might say to themselves, okay, my contractor, I know can do this for 60 grand. So they're basically, they're giving you 120, 000 in TI.

usually contingent on you signing up for a certain number of years of a lease. They may even bake some of that into the lease and you get the bill out taken care of. So that saves you from having to get a loan or anything like that. But in certain scenarios, Maybe you have family, friends, patients that are contractors that can actually do this themselves.

Maybe you are someone who's handy and has done stuff like that and you can do it yourself. Now you have an option where you can negotiate the tenant improvement amount to be reduced in the rent and then you can do the build out yourself. So instead of you saying, all right I'm going to take this 120, 000 and I'm going to let them do it, which in some scenarios is the very much the right thing to do, because in our case, when we did a build out, we didn't know any contractors.

Like we weren't had not lived in Atlanta very long. I would not have felt comfortable, doing this myself. We went through the contractor that the the landlord used, but they gave us the option to do to somebody else. But if you have that, then you can definitely save yourself some money and you can take that money.

Okay. That ti that they're offering you, and you can negotiate to have that reduced as far as the the total amount of rent is concerned. So let's say it's $120,000 and it's a 10 year lease, then you're reducing your rent by $12,000 a year. If you spread that out, or a thousand dollars a month, it could be a big difference for you in the matter, in a matter of few years, you might be net positive because you're taking this on yourself.

Something to keep in mind as we're looking at more and more of these we're getting more and more concessions. From landlords to tenants, and it's a really good place for you to be. So if you're looking at expanding, if you're looking at, your clinic is growing and you're running out of room for your staff to treat people and you see a an opportunity for you to continue to grow in your area, this is something to keep an eye on.

This is something to be aware of. And this is just one example of, how, when we work with our clients. Like how we can hit save these business owners massive amounts of money, especially during these build out phases not just through Negotiations of leases and what they should look at but also honestly through looking at some of these clauses that they have that are just bad bad things to have within an agreement that you want to make sure that you avoid right and that It is important to work locally with a commercial realtor and have an attorney take a look at your actual your lease But at this point now we have so many, reps that have come in We know what to look at for these types of businesses you know if you're going through a build out phase like this I would definitely recommend having a chat with our team head to physicaltherapybiz.

com you know pick a time to talk to one of our advisors really easy click the big button at the top of the website and and this is a scary phase. This is a very challenging phase where we have to sometimes leverage debt and sometimes, we're negotiating these long leases and we're looking at like cashflow and building things out and the first expansion phase is really hard.

The second one, maybe you're moving to an even bigger space. After you've built a standalone space is you have some more reps on your belt. It's a little bit easier, but this first one is so challenging. I see so many people make massive mistakes with this and sometimes they end up working with us after the fact.

And we're like, damn, man, you like overpaid by 30, 000. When we start to look at some of these things and by then there's nothing you can do. So somebody keep an eye on if you can manage your build out and you have your, contract, a contractor contacts or friends and family members, you may be able to save yourself a decent amount of money and add that back to your to your rent and save your overhead over extended period of time.

Hey peach entrepreneurs, we have big, exciting news, a new program that we just came out with. It is our PT biz part time to full time five day challenge over the course of five days. We get you crystal clear on exactly how much money you need to replace by getting you ultra clear on how much you're actually spending.

We get you crystal clear on the number of people you're going to see and the average visit rate you're going to need to have in order to replace your income to be able to go full time. We go through three different strategies you can take to go from part time to full time. You can pick the one that's the best for you based on your current situation.

Then we share with you the sales and marketing systems that we use within our mastermind that you need to have as well. If you want to go full time in your own practice. And then finally, we help you create a one page business plan. That's right. Not these 15 day business plans. You want to take the small business association, a one day business plan.

It's going to help you get very clear on exactly what you need to do. And when you're going to do it to take action. If you're interested in signing up for this challenge, it's totally free. Head to physical therapy, biz. com forward slash challenge. Get signed up there. Please enjoy. We put a lot of energy into this.

It's totally free. It's something I think is going to help you tremendously as long as you're willing to do the work. If you're doing the work, you're getting. Information put down and getting yourself ready to take action in a very organized way. You will have success, which is what we want. So head to physicaltherapybiz.

com forward slash challenge and get signed up today.