Subscribe to keep reading
Get new posts and unlock the full article.
You can unsubscribe anytime.Biofeedback Therapy Clinic Business Plan
- 30+ Business Plan Pages
- Investor/Bank Ready
- Pre-Written Business Plan
- Customizable in Minutes
- Immediate Access
Key Takeaways
- Mastering therapist utilization, which starts near 64%, is the primary driver for managing clinical capacity and ensuring efficient service delivery.
- Although the initial 975% Gross Margin is high, controlling Labor Costs (targeted below 35% of revenue) is critical to protecting core profitability against rising expenses.
- Sustainable scaling requires prioritizing patient acquisition efficiency by maintaining an LTV:CAC ratio of 3:1 or higher to support the long-term $13 million EBITDA projection.
- Clinics must vigilantly track the Cash Runway and minimum required cash buffer to navigate the initial operational period and secure long-term financial stability.
KPI 1 : Therapist Utilization Rate
Definition
Therapist Utilization Rate measures your clinical efficiency. It’s the percentage of time your practitioners are actually delivering paid sessions compared to their total available capacity. Since your revenue model is fee-for-service, this metric directly dictates how much money you can generate from your existing staff base.
Advantages
- Directly links staff scheduling to revenue potential.
- Identifies bottlenecks in patient flow or scheduling gaps.
- Allows for precise staffing decisions based on demand.
Disadvantages
- Sustained high rates can signal therapist burnout risk.
- It ignores non-billable but necessary work like charting.
- Targets must be role-specific; a single rate hides problems.
Industry Benchmarks
Standard utilization benchmarks for service firms often sit between 70% and 85%. However, your model shows specialized targets can be much higher, defintely reflecting the structure of biofeedback delivery. For example, the target for a Neurofeedback Therapist in 2026 is set unusually high at 600%. You must establish clear benchmarks for every role, as these targets define your maximum capacity.
How To Improve
- Implement strict cancellation policies to reduce wasted slots.
- Use scheduling software that automatically backfills canceled appointments.
- Cross-train staff to cover different service types during slow periods.
How To Calculate
To find this rate, divide the number of sessions actually completed by the total number of sessions your staff could have possibly delivered based on their scheduled hours. This calculation must be done weekly to catch issues fast.
Example of Calculation
Say one therapist is scheduled for 100 available session slots in a given week, but due to no-shows and administrative time, they only complete 80 sessions. The utilization rate is 80%.
Tips and Trics
- Review this metric every Monday morning without fail.
- Segment utilization by therapist role to spot outliers.
- Ensure 'Maximum Available Sessions' excludes mandated training time.
- If you see utilization creeping above 90%, start planning for new hires.
KPI 2 : Revenue per Therapist Hour (RTH)
Definition
Revenue per Therapist Hour (RTH) measures how efficiently your clinical staff generates income from their time on the clock. It’s the key metric for understanding service profitability, showing the dollars earned for every hour a practitioner spends delivering care. You must monitor this monthly to ensure revenue outpaces your direct labor costs.
Advantages
- Directly ties revenue to the most expensive input: therapist time.
- Highlights pricing power relative to service delivery cost.
- Allows comparison of efficiency between different practitioners.
Disadvantages
- Ignores revenue from ancillary services or product sales.
- Can penalize therapists who spend necessary time on client charting.
- Doesn't account for session length variations if pricing is flat.
Industry Benchmarks
For specialized wellness clinics like yours, the target RTH should exceed $177 per session average. This benchmark is vital because clinical wages are your primary cost of goods sold (COGS). If your RTH is too low, you’re defintely leaving money on the table, even if utilization looks good.
How To Improve
- Increase session fees incrementally where market research supports it.
- Reduce scheduling gaps between client appointments to boost utilization.
- Bundle follow-up sessions or package deals to raise the average revenue per transaction.
How To Calculate
To find your RTH, take your total revenue generated from services in a period and divide it by the total number of hours your clinical staff spent delivering those services. This calculation isolates the revenue generated per unit of clinical labor.
Example of Calculation
Say your clinic brought in $120,000 in total revenue last month, and your practitioners logged 650 total clinical hours delivering biofeedback therapy. Here’s the quick math to see if you hit the benchmark:
Since $184.62 is well above the $177 target, this month’s revenue generation efficiency looks strong.
Tips and Trics
- Track RTH segmented by practitioner type or service modality.
- Ensure 'Clinical Hours' excludes mandatory staff meetings or internal training.
- Compare RTH against Labor Cost % of Revenue (KPI 4) monthly.
- If utilization is high but RTH is low, your pricing is the problem.
KPI 3 : Gross Margin Percentage
Definition
Gross Margin Percentage measures your core service profitability. It shows what portion of revenue remains after paying for the direct costs of delivering therapy sessions, known as Cost of Goods Sold (COGS). You must review this metric monthly to ensure your fee structure supports the business before fixed overhead eats into profits. The target set for 2026 is an aggressive 975%.
Advantages
- Pinpoints the profitability of the actual therapy service provided.
- Helps set minimum sustainable session pricing levels.
- Shows efficiency gains or losses in direct service delivery costs.
Disadvantages
- It completely ignores critical fixed operating expenses like rent or administration.
- A high margin can mask poor overall volume or utilization issues.
- It doesn't account for patient retention or lifetime value.
Industry Benchmarks
For specialized, high-touch medical or wellness services, Gross Margins should generally be high, often sitting above 60% to cover the specialized equipment and facility costs. Since your target is 975%, you need to defintely confirm if this represents a standard margin or if the internal model is tracking contribution margin differently. Benchmarks are vital because they show if your session pricing is aligned with market expectations for this level of care.
How To Improve
- Increase the average price per session for new patient intake packages.
- Reduce direct costs by optimizing the use of consumables per treatment.
- Improve Therapist Utilization Rate to spread fixed session preparation costs.
How To Calculate
To find your Gross Margin Percentage, you subtract your direct costs (COGS) from your total revenue, and then divide that result by the total revenue. This calculation isolates the profitability of the service itself.
Example of Calculation
Imagine in a given month, total revenue from all therapy sessions was $150,000. If the direct costs—like session-specific supplies and the portion of therapist wages directly allocated to billable time—totaled $22,500 (COGS), here is the math:
This means 85 cents of every dollar earned covers the direct cost of the service, leaving 15 cents to cover overhead and profit.
Tips and Trics
- Track this metric strictly on a monthly cadence as planned.
- Ensure COGS only includes costs directly tied to a delivered session.
- If you see margin dip below 70%, immediately review session pricing.
- Compare actual monthly margin against the 975% 2026 goal.
KPI 4 : Labor Cost % of Revenue
Definition
Labor Cost % of Revenue shows how much your clinical staff wages consume relative to the money you bring in from therapy sessions. It’s the primary measure of staffing efficiency against sales volume. For your clinic, controlling this ratio is essential because high clinical wages directly pressure your ability to hit profitability targets.
Advantages
- Directly links staff expense to sales performance.
- Flags immediate issues if utilization drops or wages rise too fast.
- Guides hiring decisions based on current revenue capacity.
Disadvantages
- Focusing only on this can lead to understaffing and poor patient outcomes.
- It ignores the impact of fixed overhead costs on overall profitability.
- It’s misleading if revenue is highly variable month-to-month.
Industry Benchmarks
In many service businesses, labor costs run between 25% and 40% of revenue. Your target to control this below 353% starting in 2026 is an aggressive control point, suggesting you are prioritizing high clinical staffing levels early on. You must compare this against your Revenue per Therapist Hour (RTH), which targets exceeding $177/session, to see if the high labor cost is justified by high service value.
How To Improve
- Drive Therapist Utilization Rate toward the 600% target.
- Increase session pricing to grow the revenue denominator faster than wages.
- Manage overtime strictly to prevent wage creep in busy periods.
How To Calculate
Calculate this by dividing your total clinical payroll expenses by your total monthly revenue, then multiplying by 100 to get a percentage.
Example of Calculation
If your clinic paid $50,000 in wages to your practitioners last month, and total revenue from sessions was only $14,000, the pressure is high. Here’s the calculation showing the current staffing efficiency:
This 357.1% ratio means you are currently above your 2026 control target of 353%. You need to either increase revenue by $1,000 or cut wages by $1,500 just to hit that benchmark next year.
Tips and Trics
- Review this metric strictly on a monthly basis to catch trends early.
- Segment wages: track clinical pay versus administrative pay separately.
- If utilization is low, pause hiring even if the ratio looks okay today.
- Ensure revenue figures defintely exclude any non-service income streams.
KPI 5 : Patient Lifetime Value (LTV)
Definition
Patient Lifetime Value (LTV) shows the total revenue you expect one patient to generate before they stop treatment. This metric is vital because it tells you the maximum sustainable cost you can spend to acquire that patient. If you don't know your LTV, you're just guessing how much marketing spend is safe.
Advantages
- Sets the ceiling for Customer Acquisition Cost (CAC).
- Helps forecast long-term revenue stability.
- Identifies which patient profiles generate the most value.
Disadvantages
- Highly dependent on accurate retention assumptions.
- Can be misleading if patient cohorts vary widely.
- Ignores the time value of money (discounting).
Industry Benchmarks
For service businesses like therapy clinics, the primary benchmark isn't a dollar amount, but the ratio against acquisition cost. Your LTV must be at least 3x your CAC to cover overhead and generate profit. If your CAC is $500, your LTV needs to clear $1,500 to be financially sound.
How To Improve
- Increase the Average Revenue Per Session (pricing).
- Boost the Average Number of Sessions (retention/follow-up).
- Reduce patient churn by improving treatment outcomes.
How To Calculate
You calculate LTV by multiplying the average amount a patient pays per visit by the total number of visits they complete. This calculation must be reviewed quarterly to ensure your acquisition strategy remains profitable. Here’s the quick math:
Example of Calculation
If you aim to meet the minimum LTV threshold required to support a $500 CAC (which demands an LTV of at least $1,500), you need to structure your session packages accordingly. Suppose your average session price is $150. You need 10 sessions to hit the minimum LTV target. What this estimate hides is the variability; if one patient only comes twice, your actual LTV drops fast, defintely something to watch.
Tips and Trics
- Track LTV by patient acquisition channel separately.
- Calculate LTV based on gross profit, not just revenue.
- Segment LTV by condition treated (e.g., chronic pain vs. stress).
- If LTV falls below 2x CAC, immediately pause marketing spend.
KPI 6 : Customer Acquisition Cost (CAC)
Definition
Customer Acquisition Cost (CAC) tells you exactly how much cash you spend to get one new patient in the door. This metric is critical because it measures marketing efficiency; you must know this number to ensure your growth spending is sustainable. If CAC is too high, you’ll burn cash faster than patients generate revenue.
Advantages
- Shows which marketing channels are working best.
- Helps set realistic budgets supporting the 80% marketing spend review.
- Allows you to compare acquisition cost against Patient Lifetime Value (LTV).
Disadvantages
- It doesn’t show how long the acquired patient stays.
- It can hide inefficiencies if you lump all marketing spend together.
- It doesn’t account for the time lag between spending and patient booking.
Industry Benchmarks
For specialized wellness clinics, CAC benchmarks are highly dependent on referral volume versus direct advertising spend. The key benchmark here isn't an industry average, but your internal target: CAC must stay below $500. This threshold is set specifically to support the required 80% marketing spend allocation while ensuring you maintain a healthy margin relative to LTV.
How To Improve
- Increase referrals from physicians who know your service quality.
- Test smaller, highly targeted digital campaigns first.
- Improve your website conversion rate to capture more leads efficiently.
How To Calculate
You calculate CAC by dividing all the money spent on marketing and sales activities by the number of new patients you actually signed up that month. This is a straightforward division, but you must defintely exclude costs related to patient retention or administrative overhead.
Example of Calculation
Say you spent $40,000 on digital ads, physician outreach, and marketing staff salaries last month. During that same period, you onboarded 100 new patients who started therapy. Here’s the quick math for your CAC:
Since $400 is below your $500 target, that month’s marketing spend was efficient.
Tips and Trics
- Always track CAC broken down by acquisition channel (e.g., Google Ads vs. Physician Referral).
- If CAC exceeds $500, flag it immediately for the next monthly review.
- Ensure your LTV is at least 3x your CAC for a healthy unit economic.
- Be careful not to include the cost of the first session in CAC if that session is heavily discounted.
KPI 7 : Cash Runway
Definition
Cash Runway tells you exactly how long your business can keep operating before running out of money. It measures your liquidity by dividing your Current Cash Balance by your Average Monthly Net Burn (how much cash you lose each month). This is the single most important metric for survival planning.
Advantages
- Shows survival time, which dictates hiring and spending pace.
- Forces founders to confront operational losses immediately.
- Helps time capital raises accurately before a crisis hits.
Disadvantages
- It assumes the current burn rate stays flat, which is rare.
- A long runway can mask underlying issues with pricing or utilization.
- It ignores the time needed to secure new funding, which takes months.
Industry Benchmarks
For venture-backed service clinics, investors want to see a minimum of 12 months of runway post-investment. Given your stated $807k minimum cash need, if your current burn is high, you need a significant cash buffer. Aiming for 6+ months is the absolute floor for operational stability.
How To Improve
- Immediately increase Therapist Utilization Rate to drive revenue faster.
- Reduce non-clinical overhead costs to lower the monthly net burn.
- Accelerate accounts receivable collection cycles to boost current cash.
How To Calculate
Cash Runway is a simple division problem that tells you how many months you have left before you hit zero cash. You must know your current cash position and your average monthly loss. Here’s the formula:
Example of Calculation
Imagine the clinic has $2.5 million in the bank today. If you are currently losing $807k per month (your minimum need), the calculation shows a very tight window. Here’s the quick math:
This result means you have just over three months to either raise capital or drastically cut burn. That’s defintely not the target of 6 months.
Tips and Trics
- Review the runway calculation every Friday, without fail.
- Always calculate runway based on a worst-case utilization scenario.
- Factor in a 3-month buffer for any expected fundraising delays.
- If runway dips below 9 months, pause all non-essential hiring.
Biofeedback Therapy Clinic Investment Pitch Deck
- Professional, Consistent Formatting
- 100% Editable
- Investor-Approved Valuation Models
- Ready to Impress Investors
- Instant Download
Related Blogs
- Startup Costs: How to Fund and Budget for a Biofeedback Therapy Clinic
- How to Launch a Biofeedback Therapy Clinic: 7 Financial Steps
- How to Write a Biofeedback Therapy Clinic Business Plan
- Calculating the Monthly Running Costs for a Biofeedback Therapy Clinic
- How Much Do Biofeedback Therapy Clinic Owners Make?
- Increase Biofeedback Therapy Clinic Profitability with 7 Proven Strategies
Frequently Asked Questions
Focus on Utilization Rate, Gross Margin (starting at 975% in 2026), and Labor Cost % (around 35%), reviewing them monthly to ensure you stay on track for the projected $53,000 EBITDA in the first year;