Notes from the Field: What Every First-Year IOP Actually Costs

A real P&L from a 20-slot IOP's first 12 months — every line item, every surprise, and the math on when it starts working.

We're often asked "what does it actually cost to run a first-year IOP?" So here's a real one — a 20-slot IOP in a mid-market metro, opened in 2024, shared with permission (name withheld).

Year 1 Actual P&L (12 months from license approval)

Revenue

Q1: $18,000 (self-pay only, 2 admissions)
Q2: $52,000 (first commercial contracts effective month 5)
Q3: $148,000 (5 payers active, avg census 8)
Q4: $246,000 (7 payers active, avg census 14)
Total Year 1 revenue: $464,000

Costs

Rent + utilities: $54,000 ($4,500/mo for ~1,800 sqft)
Insurance (liability + property): $12,600
Clinical salaries: $286,000 (3 FTE clinicians + 1 supervisor + 0.5 medical director)
Admin salaries: $118,000 (1 UR/billing + 0.5 intake + 0.5 program director backfill)
Software (EMR + billing + phones): $28,000
Marketing (referral relationships, minimal ads): $16,000
Accreditation prep + application: $22,000
Legal + compliance: $18,000
Supplies + tests + food (for group sessions): $9,400
Contract labor (early period, before FT hires): $34,000
Founder salary (deliberately below-market first year): $60,000
Total Year 1 costs: $658,000

Net Year 1: –$194,000

Surprises That Weren't in the Plan

$34k in contract clinicians for the first four months while credentialing was pending on FT hires
$8k in surprise state licensure re-inspection fees after a policy revision requirement
$11k in credit-card processing fees on self-pay (higher than expected)
$6k in QAPI consultant fees to prepare for first accreditation survey
$4k in emergency HVAC work on the leased space (not landlord-covered)

When It Started Working

Month 8: first month with positive operational cash flow (revenue > expenses)
Month 11: first month of positive net income after depreciation
Month 14 (projected): cumulative breakeven

The Founder's Reflection

"I would have capitalized for $250k instead of $150k. The tightest month was month 5 — payments hadn't started but our census was full and we couldn't slow down. If I'd had another $100k in reserve, I would have been sleeping instead of dialing our line of credit."

Take-Aways for Your Plan

Cap-ex isn't the risk. Working capital is. Every failure we see is a working-capital failure.
Marketing spend can stay small if referrals are relational. This program spent $16k on marketing — most of it on paid provider-referral relationships (Physician CME, LinkedIn Sales Nav).
First 6 months are cash-out, not cash-in. Plan accordingly.

If you want us to build a proforma for your specific program, book a startup call. We've built dozens.