Analyzing the Monthly Running Costs of a Sports Medicine Clinic
Sports Medicine Clinic Running Costs
Running a Sports Medicine Clinic in 2026 requires careful management of high fixed costs, primarily payroll Your initial monthly operating expenses will be around $148,700, driven by $102,500 in wages for 105 Full-Time Equivalent (FTE) staff and $24,600 in fixed overhead (rent, insurance, software) Variable costs, including medical supplies and referral fees, start at about 135% of revenue Given the high initial investment in capital expenditures (CapEx) like the $150,000 clinic build-out, the business model shows a significant cash burn early on You must plan for a deep cash trough, as the model indicates reaching break-even takes 26 months (February 2028) and requires covering a minimum cash deficit of nearly $500,000 This analysis breaks down the seven core running costs you must track to achieve profitability
7 Operational Expenses to Run Sports Medicine Clinic
#
Operating Expense
Expense Category
Description
Min Monthly Amount
Max Monthly Amount
1
Staff Wages
Fixed/Variable
Payroll for 105 FTE staff in 2026 totals $102,500 monthly, making it the primary operational expense
$102,500
$102,500
2
Facility Lease
Fixed
The fixed Facility Lease expense is $15,000 per month, running consistently through 2030
$15,000
$15,000
3
Insurance
Fixed
Malpractice coverage is a fixed cost of $3,000 monthly, plus $800 for General Insurance
$3,800
$3,800
4
Medical Supplies
Variable
Medical Supplies and Diagnostic Test Kits represent 45% of 2026 revenue, scaling directly with patient volume
$0
$0
5
Utilities & Cleaning
Fixed
Utilities are budgeted at $2,500 monthly, complemented by $1,000 for recurring Cleaning Services
$3,500
$3,500
6
Software Licensing
Fixed
Mandatory software costs include $1,500 monthly for EHR Software Licensing and $300 for Security System monitoring
$1,800
$1,800
7
Referral/Lab Fees
Variable
Referral Fees (50% of revenue) and External Lab Services (40% of revenue) are key variable operating expenses
$0
$0
Total
All Operating Expenses
$126,600
$126,600
What is the total monthly operating budget required to sustain the clinic before profitability?
To sustain the Sports Medicine Clinic until its projected break-even in February 2028, you need enough cash to cover the $499,000 minimum requirement, assuming you've already assessed regulatory needs, like those detailed in Have You Considered The Necessary Licenses And Certifications To Open Your Sports Medicine Clinic?. Honestly, this $499k is the baseline buffer you must secure now to survive until defintely profitability.
Covering The Cash Gap
Goal: Cover operational deficit until February 2028.
Risk: Churn risk rises if onboarding takes 14+ days.
Sustaining Operations
Revenue relies on fee-for-service model.
Capacity depends on practitioner utilization rates.
Focus on integrated, holistic care delivery.
Target market includes student athletes.
Which single running cost category accounts for the largest percentage of monthly expenses?
Your primary expense concern for this Sports Medicine Clinic will be payroll, which generally dwarfs other operating costs in high-touch service models. If your Physical Therapists (PTs) are only utilized at 70% capacity, you are leaving significant margin on the table, defintely. We need to look at how scheduling drives profitability.
Payroll: The Largest Cost Center
Labor cost usually represents 50% to 65% of total monthly expenses for specialized clinics.
The cost base includes salaries, benefits, and associated employer taxes for all staff.
If PTs are paid a fixed salary, their cost is fixed regardless of patient volume.
Capacity utilization measures billable time versus total available working hours.
Boosting Margin Through Efficiency
If utilization moves from 70% to 85%, you effectively lower the cost per treatment by 17.6%.
This increased efficiency directly flows to the contribution margin, as revenue rises without increasing fixed labor spend.
Focus on reducing patient no-shows and administrative downtime between appointments.
How many months of fixed and variable operating expenses must we fund before achieving positive EBITDA?
You must secure funding to cover the $591,000 negative EBITDA projected for Year 1, meaning your runway needs to extend well beyond 12 months until consistent profitability. Have You Considered How To Outline The Market Analysis For Your Sports Medicine Clinic Business Plan? This initial capital buffer determines exactly how many months you can operate before the business generates enough cash flow to cover its own operating expenses. If you only fund 12 months based on the Year 1 loss, you are definitely undercapitalized for the ramp period.
Funding the Initial Loss
Target $750,000 in capital to provide a 15-month buffer against the $591k loss plus contingency.
The implied average monthly operating cash burn is about $49,250 ($591,000 / 12).
If fixed costs are $40,000/month, you need ~103 patient visits monthly just to cover overhead.
Underfunding means you hit insolvency before reaching the critical mass of patient volume.
Accelerating Profitability
Fixed costs, like facility leases and core staff salaries, dictate the time to EBITDA positivity.
Every treatment provided above the break-even volume directly shrinks the cumulative deficit.
Focus on high-margin services first, like specialized performance conditioning, to boost contribution margin.
If practitioner utilization lags below 75% by month six, the funding requirement increases by 20%.
What is the contingency plan if patient volume or average treatment price falls 15% below forecast?
If patient volume or average treatment price falls 15% below forecast for the Sports Medicine Clinic, the contingency plan centers on aggressively renegotiating the $15,000 facility lease and reviewing the necessity of the $1,500 monthly EHR licensing fee within the first 12 months.
Facility Cost Reduction
Review lease covenants immediately upon hitting the 15% shortfall threshold.
Prepare utilization data comparing actual patient flow against the $15,000 lease cost basis.
Proactively request a temporary rent abatement for 3 months to stabilize cash flow.
Model the total cost of exiting the lease versus the savings from short-term negotiation.
Software Spend & Owner Earnings
Assess if the $1,500 Electronic Health Record (EHR) license can be paused or downgraded.
Check practitioner contracts to see if compensation structures adjust based on utilization rates.
Cut all non-essential marketing spend defintely; focus only on channels proven to drive direct treatment bookings.
Key Takeaways
The initial monthly operating budget required to sustain the sports medicine clinic starts at a substantial $148,700.
Staff payroll, totaling $102,500 monthly for 105 FTEs, represents the single largest operational expense category.
Due to high initial costs and variable expenses, the financial model projects a 26-month runway to reach the break-even point in February 2028.
A minimum cash buffer of nearly $500,000 is required to cover the projected cash deficit until the clinic achieves positive cash flow.
Running Cost 1
: Staff Wages and Benefits
Payroll Dominance
Payroll for your 105 FTE staff in 2026 hits $102,500 monthly. This expense dwarfs other fixed costs, establishing staff compensation as the single biggest lever in your operating model. You must drive volume to support this required base cost.
Cost Calculation
This $102.5k monthly figure covers all wages and benefits for 105 full-time staff planned for 2026. You calculate this by multiplying the required headcount by the average loaded cost per employee (salary plus payroll taxes and insurance). It represents the baseline overhead before patient volume drives variable costs.
Headcount target: 105 FTE staff.
Cost driver: Loaded average salary.
Timing: Year 2026 projection.
Managing Staff Spend
Managing this primary cost means optimizing utilization, not just cutting headcount. If 105 staff generate insufficient revenue, your margin collapses fast. Avoid over-hiring specialists too early; you need defintely to stagger hiring with confirmed patient demand. Focus on scheduling efficiency to maximize billable hours per clinician.
Benchmark utilization rates closely.
Stagger hiring based on utilization.
Review benefits package competitiveness.
Cash Flow Risk
Since payroll is your largest fixed outlay, any delay in patient acquisition past the 2026 projection directly strains cash flow. If your blended average revenue per FTE dips below the required threshold to cover their loaded cost, profitability vanishes quickly.
Running Cost 2
: Facility Lease
Lease Stability
The facility lease sets a predictable floor for overhead. You have a fixed cost of $15,000 monthly locked in until 2030. This stability helps forecast your break-even point accurately, but it demands high utilization to cover this large fixed base.
Lease Coverage
This $15,000 covers the physical space needed for your sports medicine clinic operations. It is a fixed expense, meaning it doesn't change whether you see 10 patients or 100. It sits alongside other fixed costs like $102,500 in staff wages and $3,800 in insurance premiums.
Fixed monthly rent: $15,000
Duration commitment: Through 2030
Budget impact: Fixed overhead base
Managing Fixed Space
Since this cost is fixed until 2030, the only way to reduce its impact is by maximizing patient volume. If utilization is low, this lease becomes a heavy drag against variable costs, like the 45% in supplies or the 90% total in referrals/labs you pay per service. Defintely focus on patient flow.
Avoid underutilizing space early on.
Ensure lease terms allow subleasing options.
Track utilization against fixed cost coverage.
Lease Risk
Committing to $15,000 monthly for seven-plus years means your initial patient acquisition must be strong. If volume lags, this fixed cost quickly erodes contribution margin from revenue streams like fee-for-service treatments. That's a serious cash flow pressure point.
Running Cost 3
: Medical Malpractice Insurance
Insurance Overhead
Your baseline fixed insurance expense for the clinic is $3,800 per month, combining mandatory malpractice and general liability coverage. This cost must be covered before generating any revenue from patient treatments.
Fixed Insurance Inputs
This $3,800 monthly outlay is non-negotiable overhead. It breaks down into $3,000 specifically for Medical Malpractice Insurance, which protects against claims related to patient care, plus $800 for General Insurance covering premises liability. Since this is fixed, it hits your profit and loss statement regardless of patient volume.
Malpractice: $3,000/month
General Liability: $800/month
Total Fixed Insurance: $3,800
Controlling Liability Spend
Since these are fixed, you can defintely attack them annually. Don't just auto-renew; shop quotes every 12 months to test the market. A common mistake is bundling too many services without reviewing the risk profile of your specialized offerings. We should aim to keep this under 1.5% of projected gross revenue.
Shop quotes annually.
Review coverage limits yearly.
Ensure proper risk segmentation.
Annual Fixed Cost
Every $3,800 in insurance is $45,600 in annual fixed costs you must cover before realizing profit. This means your 105 FTE staff wages and facility lease are the primary drivers of your break-even point, not this insurance line item.
Running Cost 4
: Medical Supplies Consumed
Supply Cost Scaling
Medical supplies and diagnostic kits are a major variable expense, hitting 45% of projected 2026 revenue. This cost scales directly with patient volume, meaning every new treatment adds significant consumable expense. You must track utilization per procedure closely to manage this line item effectively.
Cost Calculation Inputs
Estimate this cost by tracking the average consumable spend per patient visit or procedure code. You need unit costs for gauze, tape, injection supplies, and specific test kits multiplied by the expected volume. Since it’s 45% of revenue, if you project $500,000 in 2026 revenue, supplies will be $225,000 that year. That’s a big number to manage.
Track utilization per procedure.
Calculate cost per patient encounter.
Use projected 2026 revenue base.
Optimization Tactics
Controlling this 45% share requires strict inventory management and bulk purchasing agreements with suppliers. Avoid stockouts, but minimize waste—unused, expired kits are 100% lost margin. Compare vendor pricing quarterly; small shifts in unit cost make a big difference here, though you can't compromise compliance.
Negotiate tiered pricing early.
Mandate usage tracking by provider.
Audit inventory levels monthly.
Margin Context
Compared to fixed overhead like the $15,000 lease or $102,500 staff payroll, supplies move with the top line. However, they are dwarfed by referral fees (50% of revenue) and external lab costs (40% of revenue). Focus your initial margin improvement efforts on those two larger variable buckets first.
Running Cost 5
: Utilities and Cleaning
Fixed Facility Costs
Utilities and cleaning combine for a fixed overhead expense of $3,500 per month for the clinic. This predictable operating cost is separate from volume-driven expenses like supplies or referral fees, so you must cover it regardless of patient flow.
Cost Breakdown
This $3,500 covers essential upkeep. Utilities are set at $2,500 monthly, covering power and water needed for specialized equipment. Cleaning Services add another $1,000 monthly for recurring professional maintenance of the treatment areas.
Utilities: $2,500
Cleaning: $1,000
Total: $3,500
Cost Control Tactics
Since these costs are mostly fixed, focus on optimizing usage rather than cutting the service itself. For utilities, ensure high-use equipment is energy efficient. Cleaning contracts should be reviewed defintely every year to confirm the scope still matches operational needs.
Audit utility providers annually.
Negotiate cleaning scope carefully.
Check for hidden service fees.
Overhead Context
This $3,500 is relatively low when stacked against major variable costs like 50% Referral Fees. If the clinic achieves $100,000 in monthly revenue, this overhead component is just 3.5% of sales, which is a healthy ratio for facility stability.
Running Cost 6
: EHR and Software Licensing
Mandatory Software Spend
Your mandatory software stack costs $1,800 monthly, comprising EHR access and security monitoring. This fixed overhead must be covered before any patient volume generates positive contribution margin. Don't mistake these necessary compliance costs for scalable revenue drivers.
Software Cost Breakdown
This $1,800 covers the essential Electronic Health Record (EHR) system at $1,500/month and security monitoring at $300/month. These are fixed costs, meaning they don't change if you see 10 or 100 patients next month. They sit alongside your $15,000 lease and $102,500 payroll as baseline overhead.
Managing Licensing Spend
EHR costs often hide implementation fees or per-provider seat charges. Negotiate annual contracts now to lock in the $1,500 rate; avoid month-to-month billing traps. Always check if the security system monitoring is bundled elsewhere, as duplicating services is a defintely common, easy-to-miss drain.
Implementation Risk
If your chosen EHR requires significant customization or integration work, budget an extra $5,000 upfront for setup. Failure to account for implementation time means your staff might be running inefficient manual processes for the first 60 days, increasing operational risk.
Running Cost 7
: Referral Fees and Lab Services
Variable Cost Shock
Your variable operating expenses are dangerously concentrated: Referral Fees eat 50% of revenue and External Lab Services consume another 40%. This means 90% of gross revenue is immediately paid out before covering supplies, wages, or rent. This structure demands extremely high patient volume or very high treatment prices just to approach contribution margin.
Modeling External Payments
These costs are direct payouts for services rendered or business sourced. To model them accurately, you need the expected Average Treatment Value (ATV) multiplied by the volume of treatments that trigger these specific fees. If you project $300,000 in revenue for 2026, expect $150,000 to go to referral partners and $120,000 to external labs. That leaves little room for error.
Referral input: Contracts dictating the 50% split.
Lab input: Cost per specific diagnostic test ordered.
Total variable outflow: 90% of gross revenue.
Controlling the 90%
You must aggressively attack this 90% outflow to cover your $102,500 staff cost and $15,000 lease. The quickest lever is negotiating referral fees down to 35% or building proprietary patient acquisition. For labs, bringing simple testing in-house can cut the 40% expense if utilization rates justify the initial capital outlay.
Benchmark: Aim to drop referral fees below 35% quickly.
Mistake: Paying high fees for low-value, non-repeat patients.
Target: Internalize diagnostic testing volume over time.
Action Point
Your break-even point is defintely driven by your ability to reduce the 90% variable burden, since Medical Supplies already consume 45% of revenue. Focus financial modeling on scenarios where you secure direct-to-consumer bookings to lower referral dependence immediately.
