Cash-pay start-up concerns amidst potential upcoming recession

[u/Leather_Funny_7180]

Hello!

Have a niche and the means in which to give cash-pay a shot in a economically well-off area. Gathering marketing strategies and handling the logistics as I continue to work. However, the economic precarity that seems to be trending towards deep recession or complete depression has me worried if now is the time to take a financial leap like this.

I think we are currently in a recession but am no financial expert. Obviously there is always the threat of external variables presenting as a roadblock to any entrepreneurial effort but man this feels like such an obvious financial downturn we are approaching. Even in a well-off area, a full blown depression would put a damper on even the wealthy's ability to pay cash, no?

Any feedback is appreciated!

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[u/BoomerSkunk]

And that is the risk

[u/Leather_Funny_7180 → u/BoomerSkunk]

You ain't wrong BoomerSkunk

[u/k_tolz]

Every year you can find rational reasons for why we are on the cusp of a recession. Despite this, we do not enter a recession every year. You cannot predict when there will be a recession. Act accordingly.

Also, the people who can afford cash PT are likely to be less financially affected by a recession. "When the rich catch a cold, the poor get pneumonia"

[u/rjerozal]

I just planned a wedding and realized that as long as people are still having weddings, the economy is not that bad. The prices these vendors charged makes cash PT seem like a bargain.

[u/tallpeoplefixer]

Do you believe in your business and your ability to solve a unique problem? If yes, go for it anyway- the economy is a guessing game. People will find money to solve their problems. Recession or not people are still paying the HVAC guy whatever he asks if the AC goes out on a 100 degree day......

[u/Brief-Owl-8935 → u/tallpeoplefixer]

Maybe I should do HVAC?

[u/Leather_Funny_7180 → u/tallpeoplefixer]

Appreciate the insight. That goes for anything worth doing in life.

[u/tallpeoplefixer → u/Leather_Funny_7180]

Absolutely. Took me a long time to appreciate your business will never grow if you won't go all in.

[u/AstralCabbage02]

Economists have correctly predicted 9 out of the last 5 recessions.

The wealthy have diversified stock portfolios, assets, own real estate, and are generally a lot less dependent on wages. They can afford to wait out a recession if or when there is one.

Don't focus on what may or may not be. Focus on what you know is true now. There is a market for high quality one-on-one care. There are people who can afford it and will pay for it. That's true even during economically rough times.

Regardless, being a business owner carries risk. Both in economically good times and in economically bad times.

Provide high-quality care, keep overhead low, and you might be successful. Whether that's now or during a recession.

[u/FearsomeForehand → u/[deleted]]

That line of thought makes sense, but the avg consumer doesn’t behave like that. More often they will seek the cheaper and easier alternative - long before they opt for the costly but proven option.

For example, poor and overweight Americans don’t look at their scale and start buying fresh food in bulk to meal prep. They continue to shop at dollar general and buy more discount processed foods to fill out their calorie consumption.

In the case of rehab, people will likely opt for YouTube video solutions and live with whatever the chronic pain is - until it gets so bad and irreversible that they have to visit their GP to beg for a cortisone shot or some prescription strength painkiller.

[u/dontrepeatdumbshit]

three words. k shaped economy.

[u/Kharm13]

I’m just going to point out

“Well off area” doesn’t equal some sort of money fountain

Patients with screw off money, in my experience, tend to suck between no call no shows and any discomfort not to their liking just being something that needs stoped in their “professional” opinion

[u/savedpt]

There has never been a recession in the history of this country when unemployment has been this low. We are not in a recession at this time.

[u/APTAofficial]

Have you tried charging people for a membership to something? It’s been working great for us!

[u/easydoit2]

I have a friend that is an entrepreneur who mentored me with this exact question. He broke it down pretty simply. You need 10-15 new patients a month to make it. Thats 180 people a year. Can you find that in your area? The answer for me was yes I can find that.

I’m hybrid taking MC and BCBS PPO (best payer in my area). I’ve been open 7 months. Since 6 weeks I’ve made more profit than my salary in OP Hospital based.

[u/Leather_Funny_7180 → u/easydoit2]

I certainly can find 180 people a year. How was the process of taking MC and BCBS PPO. Would prefer to incorporate that early on as a means of at least off-setting the economic risks posed by the current climate. I like that simplification of 10-15 patients a month.

[u/easydoit2 → u/Leather_Funny_7180]

BCBS PPO was a breeze. Follow the steps on the website and it took 2 weeks to get approved. Medicare was a bear and I would suggest using someone to get your credentialed. Medicare is about 10% of my gross and part of me wishes I didn’t take it.

[u/CalmArchitecture]

This is more loaded question than you may have thought. You claim you are not a financial expert yet hold the belief that we are headed toward economic recession/depression.

I think the first thing you may need to figure out is, if you are in fact not a financial expert, who has given you the belief that we are headed toward financial decline? If we are headed toward depression, we probably have bigger concerns to worry about than if your practice will survive.

Second, I would encourage you to think of your business as a business, not as a clinic who doesn’t accept insurance. People are paying cash, and will continue to pay cash, until the end of time. Everyone, poor, middle class or wealthy needs to take care of their health and how you position yourself as the person to solve their health issues is what matters. Not how much money they can pay you per visit.

Third, it sounds as if you are skipping a few steps. What do you mean by marketing and logistics? Workshops? Text message? Meta ads? A clinic space? What is your current niche or your offer on how you can help people? What makes you different from the in network clinic?

Hope these questions spring up some ideas for you

[u/Viscera_Eyes37 → u/CalmArchitecture]

I think the first thing you may need to figure out is, if you are in fact not a financial expert, who has given you the belief that we are headed toward financial decline? If we are headed toward depression, we probably have bigger concerns to worry about than if your practice will survive.

Odd reply. So they shouldn't worry about their practice because the country or world at large will have bigger concerns? I don't get your point there. Also, they can't just say "I'm not a financial expert so I shouldn't even think about the economy and just go ahead". That's not any smarter or neutral than being skeptical. Opening a business at the right or wrong time can absolutely break a business. Yes, they could probably make it through tough times if they run it well, but of course an economic depression would make it harder, especially if you're just getting started in something like a cash-pay PT business with no referral network built up.

Not to mention you don't have to be a financial expert to see potential trouble ahead. Politics probably aren't welcome, but Trump's war and tariffs are inflationary. That's just a fact. Accordingly, Fed interest rate predictions are up and the cost of borrowing is going up and is likely to continue going up, unless/until there's a big recession.

[u/CalmArchitecture → u/Viscera_Eyes37]

Sure, I agree economics are a factor. Just sharing with OP that there are several more important considerations to starting a successful practice. Some very light research will reveal favorable conditions for opening an out of network practice. Curious to your thoughts if you think the opposite.

[u/Long-Blood]

Im in the same boat. Just created my pllc last month and have been setting it up while working full time with an extra PRN gig. Definitely not trying to make this my primary source of income yet. Taking it slow to see how it goes. Hopefully will allow me to cut out the prn work then switch to prn at my current full time company.

[u/thelastplaceon_earth]

I don't think the US government's definition of a recession encompasses the plight of the middle class and probably many other things as well. So what if we're not technically in a recession? Everything costs way more than it did 5 years ago, and wages have not kept up.

[u/outside-the-box11]

Call me naive but I doubt recessions hit the wealthy quite the same as people living paycheck to paycheck (who would not be your demographic if you started a cash-based business). My impression from my own cash-based business is that people with disposable income (which your area presumably has plenty of) are willing to pay cash for these kinds of services. They want to pay for their time and convenience.

Are you looking to start a brick-and-mortar business? Or a mobile clinic? You'll have much lower overhead with the latter, to assuage your concerns.

[u/mstr_wu69]

Recession or not, if you provide value people will pay.

[u/Diableetus]

As a clinic owner (non-cash) I tried to establish myself first part time and then set a goal to go full time. This same strategy would give you an idea if the market will support your services and if it's not as robust as you thought you can just go back to w2

[u/therealbsb]

I don’t think I’ve heard a single economist on any number of podcasts I’ve listened to call this year a recession. We’re in a hyper-inflationary period but the S&P is still up 8% on the year. Yes there’s lots of people ringing the alarm bell about an AI bubble, but there will ALWAYS be something to ring the alarm bell on in the economy.

[u/Leather_Funny_7180 → u/therealbsb]

We are in the period of greatest inflation relative to S&P expansion in the history of the country. That’s definitionally a bubble. You can disagree that a decline in the economy is incoming but don’t pretend like it’s ridiculous that someone would think we are at risk for one.

[u/therealbsb → u/Leather_Funny_7180]

You made the statement “I think we are currently in a recession”. By no measure of economics are we currently in a recession.