Occupational Therapy Clinic Running Costs: $92K Monthly

Occupational Therapy Clinic Running Costs

Expect monthly running costs for an Occupational Therapy Clinic in 2026 to start around $90,000 to $95,000, driven primarily by payroll and facility expenses Your initial focus must be on maximizing therapist utilization, as wages account for roughly 72% of total operating expenses before benefits With 560 treatments projected monthly at an average price of $163, your first year revenue is $91,350/month, meaning you are operating near break-even but face a significant initial EBITDA loss of $391,000 This guide breaks down the seven core recurring costs you must manage to reach the projected break-even point in February 2028

7 Operational Expenses to Run Occupational Therapy Clinic

#	Operating Expense	Expense Category	Description	Min Monthly Amount	Max Monthly Amount
1	Staff Payroll and Benefits	Personnel	This covers 10 FTEs in 2026 (6 OTs, 2 Assistants, 2 Admin/Management) totaling $66,666 in base monthly wages before benefits or employer taxes.	$66,666	$66,666
2	Facility Lease/Rent	Fixed Overhead	The fixed monthly expense for the clinic space is $7,500, requiring careful negotiation of lease terms and space utilization for five distinct therapy types.	$7,500	$7,500
3	Billing Fees and Supplies	COGS	Variable costs of goods sold, including Billing Service Fees (40%) and Consumable Therapy Supplies (20%), amount to $5,481 monthly based on 2026 revenue.	$5,481	$5,481
4	Patient Acquisition Marketing	Sales & Marketing	Initial marketing spend is high at 80% of revenue, equaling $7,308 per month in 2026, which must decrease as patient retention improves.	$7,308	$7,308
5	Insurance and Regulatory Fees	Compliance	Fixed monthly costs for Professional Liability Insurance ($750) and Licensing & Regulatory Fees ($200) total $950, which are non-negotiable compliance expenses.	$950	$950
6	Technology and EHR Systems	Technology	This includes the fixed EHR Software Subscription ($800) and variable EHR Transaction Fees (15% of revenue), plus $600 for General IT Support monthly.	$1,400	$1,400
7	Utilities and Office Overhead	Facility Operations	Essential facility operating expenses like Utilities ($1,000) and Office Supplies & Maintenance ($400) are fixed monthly costs totaling $1,400.	$1,400	$1,400
	Total	All Operating Expenses		$90,705	$90,705

What is the total required monthly operating budget for the first 12 months?

The total required monthly operating budget for the first 12 months is determined by calculating the maximum monthly cash burn rate and multiplying it by the required runway, plus startup costs, to establish total working capital needed before you hit positive cash flow; understanding this baseline is crucial, and you can review related profitability factors here: Is The Occupational Therapy Clinic Highly Profitable?

Fixed Overhead Snapshot

Identify non-negotiable fixed costs; these are expenses that exist regardless of patient volume.
Core fixed costs include facility lease payments, base salaries for essential staff, and liability insurance coverage.
If your minimum monthly fixed cost is $25,000, that is your baseline monthly cash burn before any revenue comes in.
Variable costs, like minor supplies or billing fees, will increase this burn slightly, but fixed overhead sets the floor; it’s defintely the first number to nail down.

Calculating Total Funding Need

The 12-month budget means securing capital equal to 12 times your net monthly burn rate.
Always add a 3-month contingency buffer; this covers unexpected delays in insurance credentialing or slow initial patient acquisition.
If your burn is $20,000 monthly, you need $240,000 just to cover operations through month 12, plus startup expenses.
This total working capital must be secured before you begin operations to ensure you don't run dry chasing revenue targets.

Which cost categories represent the highest percentage of recurring expenses?

For the Occupational Therapy Clinic, therapist payroll will consume the largest share of recurring expenses, significantly outweighing fixed facility costs, but the 80% patient acquisition expense demands immediate attention.

Payroll vs. Rent

Therapist payroll is the single largest recurring cost driver for service delivery.
If payroll runs at 55% of total operating expenses, therapist utilization drives margin.
Facility rent might account for only 15% of that total spend, making it a smaller fixed burden.
Focus on scheduling efficiency to maximize billable hours per provider.

Variable Cost Pressure

Patient acquisition costs consuming 80% of revenue is a major red flag for scalability.
This high variable load means revenue growth doesn't automatically improve profit margins.
Reducing acquisition spend directly impacts profitability, which relates to What Is The Main Measure Of Success For Your Occupational Therapy Clinic?.
This high cost suggests poor referral density or defintely inefficient marketing spend per booked session.

How much working capital is needed to cover operations until break-even?

You need enough cash to cover the $391,000 cumulative EBITDA loss projected for Year 1, plus a minimum operational buffer of $90,000, aiming to sustain the Occupational Therapy Clinic until February 2028; if you're planning this launch, Have You Considered The Best Strategies To Launch Your Occupational Therapy Clinic Successfully?

Calculate The Cash Gap

Total cash required must cover the $391k Year 1 EBITDA deficit.
This deficit is the operational cash burn before reaching positive cash flow.
The runway must extend past February 2028 based on current estimates.
This calculation defintely assumes current revenue ramp assumptions hold steady.

Set The Minimum Buffer

Secure an extra $90,000 cash buffer immediately.
This buffer protects against delays in patient acquisition or insurance reimbursements.
It covers unexpected overhead spikes, like higher supply costs or staffing needs.
Without this buffer, reaching break-even by the target date is highly unlikely.

What is the contingency plan if therapist capacity utilization falls below 60%?

If therapist capacity utilization dips under 60%, the contingency plan centers on immediately cutting discretionary spending, primarily marketing, while calculating the minimum revenue threshold required to cover fixed overhead of $11,250 and essential staff payroll. This swift response prevents cash burn, defintely. To understand the levers you can pull when utilization drops, reviewing the profitability drivers for this type of service is key; for instance, you might ask, Is The Occupational Therapy Clinic Highly Profitable?

Immediate Cost Triage

Stop all non-essential digital advertising spend today.
Review vendor contracts for 30-day cancellation clauses.
Freeze hiring for any non-clinical support roles.
Immediately halt spending on office upgrades or non-essential supplies.

Minimum Revenue Floor

Calculate total essential payroll costs monthly.
Determine the blended contribution margin percentage (Revenue minus direct treatment costs).
Divide $11,250 plus essential payroll by the CM percentage.
This resulting dollar figure is the revenue needed to break even.

Key Takeaways

The estimated monthly running cost for an Occupational Therapy Clinic in 2026 starts around $92,075, driven primarily by payroll and facility expenses.
Staff payroll constitutes the largest recurring expense, accounting for roughly 72% of total operational costs before factoring in benefits.
The financial model projects that the clinic will require 26 months of operation to reach the projected financial break-even point in February 2028.
Fixed overhead costs alone total $11,250 monthly, necessitating a significant cash buffer to manage the projected initial EBITDA loss of $391,000 in Year 1.

Running Cost 1 : Staff Payroll and Benefits

2026 Base Payroll Commitment

Staff payroll in 2026 commits to $66,666 monthly in base wages for 10 full-time employees (FTEs). This figure is the starting point; you must budget for employer taxes and benefits on top of this base.

Payroll Inputs Defined

This $66,666 base payroll covers 10 FTEs projected for 2026 across clinical and support roles. You need accurate salary quotes for each tier to model this accurately. This cost is fixed until you scale hiring past 10 people. Honestly, this is a big fixed chunk.

Base wages: $66,666 per month.
Headcount: 10 FTEs total.
Roles: 6 OTs, 2 Assistants, 2 Admin/Management.

Managing Labor Costs

Managing this fixed labor cost hinges on maximizing billable time for the 6 OTs. If OTs aren't hitting target utilization rates, the effective hourly cost spikes fast, eating margin. Don't hire the second admin person until you absolutely cannot handle the volume.

Track OT utilization rates closely.
Benchmark benefits packages against local healthcare norms.
Delay adding management FTEs until volume demands it.

Total Burden Calculation

The $66,666 base wage is the starting line; expect total employer burden—including employer payroll taxes and required benefits—to add between 25% and 35% on top of this figure for accurate cash flow planning.

Running Cost 2 : Facility Lease/Rent

Rent Overhead

The fixed monthly rent for your clinic space is $7,500, a non-negotiable overhead line item. You must optimize utilization across the five distinct therapy types to ensure this space isn't underused, which directly impacts profitability. That’s the bottom line.

Lease Cost Inputs

This $7,500 covers the physical footprint needed for operations, supporting staff payroll and patient services. Since this is fixed, maximizing billable hours per square foot is key. You need signed lease quotes to establish the initial term and understand future escalation clauses.

Fixed overhead component.
Covers space for 5 therapy types.
Needs lease negotiation review.

Space Optimization

Negotiate lease terms aggressively upfront, focusing on tenant improvement allowances to offset build-out costs. Over-leasing space defintely before patient volume justifies it is a common mistake. If you can delay expansion by 18 months, you save significant capital.

Push for lower starting rent.
Avoid long-term space guarantees.
Factor in utility load, $1,400/month.

Utilization Impact

This fixed cost must be covered by the contribution margin generated by your practitioners delivering services across the five required therapy zones. Poor utilization means this $7,500 eats directly into owner equity, especially when weighed against the $66,666 in monthly base payroll.

Running Cost 3 : Billing Fees and Supplies (COGS)

COGS Impact

Your variable Cost of Goods Sold (COGS), driven by billing fees and supplies, hits $5,481 monthly in 2026. This 60% combined rate—40% for billing and 20% for supplies—directly impacts your gross margin before overhead. You need to watch utilization closely.

Variable Cost Inputs

This $5,481 estimate ties directly to 2026 revenue projections. Billing Service Fees account for 40% of revenue, covering claims submission and processing. Consumable Therapy Supplies are 20%, covering items like resistance bands or splinting materials used per patient session. These are your primary variable costs.

Calculate based on projected monthly revenue.
Billing fee is 40% of revenue.
Supplies are 20% of revenue.

Margin Levers

Reducing this 60% variable load is crucial for profitability. Focus on negotiating lower rates with the billing service provider. Also, bulk purchasing for therapy supplies can lower the 20% component. If you can reduce billing fees by just 5 points, that’s immediate margin improvement.

Audit current billing service contract rates.
Negotiate volume discounts for consumables.
Improve documentation speed to reduce rework costs.

Margin Reality Check

Since these costs are 60% of revenue, your gross margin before staff payroll and rent is only 40%. If your average revenue per treatment is low, this high COGS eats profit fast. You defintely need high patient volume to cover fixed costs.

Running Cost 4 : Patient Acquisition Marketing

Marketing Burn Rate

Patient acquisition costs are front-loaded and unsustainable at current levels. In 2026, marketing will consume 80% of revenue, costing $7,308 monthly. This high Customer Acquisition Cost (CAC) signals dependence on new patients; improving retention is the only path to profitability.

Cost Breakdown

This $7,308 monthly marketing spend for 2026 covers all initial patient outreach before organic traction builds. It is calculated as 80% of projected revenue for that period. The primary inputs are direct advertising costs and any referral fees paid out to secure those first appointments.

Lowering Acquisition Cost

Lowering this 80% burn rate requires shifting focus from acquisition to retention. Every patient retained avoids that $7,308 expense reappearing next month. Target retaining patients past the initial treatment cycle to lower the effective CAC signifcantly.

Profitability Threshold

Relying on 80% marketing spend means your unit economics are upside down right now. You need to model the point where marketing drops to 20% of revenue. That transition point defines when the business model actually starts working profitably.

Running Cost 5 : Insurance and Regulatory Fees

Fixed Compliance Costs

Compliance costs for this clinic are fixed at $950 monthly, covering necessary Professional Liability Insurance ($750) and Licensing Fees ($200). These are mandatory operational expenses you can't cut if you want to treat patients legally. You need to budget for this non-negotiable overhead right away.

Cost Breakdown

This $950 covers two essential fixed overhead items. Professional Liability Insurance protects against claims arising from treatment errors, costing $750 monthly. Licensing and Regulatory Fees, at $200, ensure you meet state and local healthcare board requirements to operate legally. You calculate this by simply adding the two set monthly quotes together.

Liability Insurance: $750/month
Licensing Fees: $200/month
Total Fixed Compliance: $950/month

Managing Fees

Since these are compliance mandates, you can't reduce the core amounts without risking closure. The main lever is shoping around for insurance quotes during renewal, though savings are usually small. A common mistake is underinsuring; that risk is too high for a hands-on practice like this. Don't skimp on the $200 licensing fees, either.

Shop insurance quotes at renewal.
Never reduce coverage limits.
Ensure timely fee payments.

Fixed Overhead Hit

These $950 represent 100% fixed overhead. Unlike variable costs tied to patient volume, this amount hits your profit and loss statement regardless of whether you see 1 or 100 clients. It must be covered by your Staff Payroll and Facility Lease revenue targets first.

Running Cost 6 : Technology and EHR Systems

Tech Cost Structure

Technology expenses combine a fixed base of $1,400 monthly with transaction fees that scale directly at 15% of revenue. Managing this structure requires optimizing revenue per treatment to absorb the fixed $800 subscription and $600 IT overhead efficiently.

EHR Cost Inputs

This technology budget includes the base $800 Electronic Health Record (EHR) subscription and $600 for general IT support, totaling $1,400 fixed monthly overhead. The variable component is 15% of gross revenue, acting like a direct cost of service delivery. To budget accurately, you need projected monthly revenue figures for the 2026 timeframe.

Fixed cost: $1,400 (Subscription + IT Support)
Variable cost: 15% of gross revenue
Input needed: Total Monthly Revenue forecast

Managing Tech Fees

Because the transaction fee is high, focus on maximizing revenue capture per treatment. You should defintely negotiate the 15% rate down if possible, or bundle services to increase the Average Transaction Value (ATV). High utilization keeps the $1,400 fixed cost covered sooner.

Scrutinize the 15% transaction fee structure.
Bundle services to raise ATV.
Audit IT support scope vs. $600 spend.

Variable Cost Impact

The 15% variable fee means every dollar of revenue growth costs you 15 cents in tech expense immediately. This structure pressures utilization rates to absorb the fixed $1,400 baseline before true gross profit generation starts on tech costs.

Running Cost 7 : Utilities and Office Overhead

Fixed Facility Costs

Utilities and basic office upkeep are fixed overhead components for the clinic. These two items total a predictable $1,400 per month. This cost is necessary regardless of how many patients you see.

Cost Breakdown

This $1,400 covers essential facility operations that don't change with patient volume. Utilities, like electricity and water, run $1,000 monthly. Supplies and maintenance add another $400. This is a baseline operational cost before considering rent or payroll.

Utilities: $1,000 fixed monthly.
Supplies/Maintenance: $400 fixed monthly.
Total baseline overhead: $1,400.

Managing Fixed Spend

Since these costs are fixed, there's little volume leverage, but efficiency matters. Focus on reducing consumption, not cutting necessary compliance. Avoid overstocking expensive therapy supplies, which could bleed into this category budget. You can defintely see savings here by being mindful.

Monitor utility usage closely.
Negotiate supply contracts yearly.
Maintenance costs should stay predictable.

Overhead Floor

Fixed overhead like this $1,400 defines your minimum monthly burn rate, excluding variable costs like billing fees. Know this number precisely to calculate your true operational break-even point quickly. It's a non-negotiable cost floor.