One of the number one things that clinicians in private practice ask about is knowing how to grow their practice and get more clients. A counseling or therapy private practice is absolutely dependent upon having a steady flow of clients and new referrals. It’s what keeps our doors open and brings us our income. And how a private practice gets those new referrals and grows depends a lot on where they are in terms of their stage of growth.
I recently read an article from Entrepreneur Magazine about business life cycles. In it the author, Neil Petch, divided a business’ growth into 5 phases: 1.) Seed and Development, 2.) Start-up, 3.) Growth and Establishment, 4.) Expansion, and 5.) Maturity and Possible Exit. As I thought about it, these stages certainly have a lot of parallels for private practice.
So, I thought we could look at some “stages” in the context of private practice and how you might think about getting clients and your own growth.
Acting on the Dream and Learning
In this initial stage of private practice you have made the decision to go into or start a private practice. You have taken action on the “dream” and are putting the pieces together. You have given it a lot of thought and have decided to “pull the trigger”. It’s a time of organizing and learning.
In this stage is so important to learn as much as you can about running a small business and marketing. Seek out the help of other clinicians and consultants to learn from their experience and expertise. Also learn from others in small businesses outside your specific field. Look into joining your local Chamber of Commerce and start making those contacts.
In this stage you are going to be doing the things you need to do to actually get started. You will be getting all the things you will need to actually start seeing clients
- Getting an office space
- Building your website
- Social media pages
- Phone set-up
- Paperwork needed
- Business cards made
- Setting your schedule
- Getting credentialed with insurance panels (if you decide to do that)
This start-up phase is simply doing what is needed to get the basic infrastructure you need to start seeing clients. This is also the stage at which you will need to put a lot of emphasis on marketing your practice and getting those relationship with referral sources established.
Tip: Deciding to joining insurance panels is sometimes a tough choice. The one big reason people decide to join them is it pretty much guarantees a flow of referrals. So research this in your area. You can decide if the time and effort you put into it will create a payoff for you. Insurance companies will pay you less per session than you could get being strictly private pay. One strategy is to join just a few panels the will bring you the most volume and have higher reimbursement rates.
Growing and Building
In this phase of private practice you have started seeing clients and your phone is starting to ring. It’s an exciting and also scary phase to be in. Especially during those initial months of growth. In this stage it will be important to continue to focus on marketing your practice and creating your referral base. For most practices, those first 5-10 clients require a lot of hard work. But eventually, with a lot of patience and persistence, a practice will reach a tipping point when referrals start pouring in and the phone constantly rings.
Also in the stage of growth, there is still a lot of learning at tweaking your practice. You will need to constantly evaluate and adjust your daily routine and the management of your practice. Work on your own productivity habits in terms of staying organized and developing good work habits.
Tip: Learn how to “batch” and create templates for repeated tasks. It is important to learn how to streamline your processes around intake, documentation and other administrative functions. These things can take up a lot of time and cut into your time in seeing clients. If you don’t have a handle on these things, it will lead to burnout. Check out this article on that topic
The other thing to remember about this stage is that it is when you are developing some stability for your practice. In the early part of Growth and Building, it is important to develop a good financial strategy for yourself personally and for your practice.
It is very likely that in this stage you will still be building your private practice as a part-time endeavor. If at all possible, take the money you make from your practice and reinvest it into the practice. In other words, start saving and build a reserve for your practice. Ideally, you would want to have 2-6 months of your current salary and expenses saved as a buffer. The reason for this is that most practices can see an “ebb and flow” of clients. You have to see clients in order to get paid. We are subject to no shows and cancellations. Also, you will probably need to take some time off for vacations or other things. Having a buffer helps keep your cash flow steady and take some pressure off when those things occur. And if you do need to get into your reserves, try to quickly replenish them after they are used.
Tip: Look into setting up a Money Market account for your savings. The interest rates are slightly better than a regular savings account.
Expanding and “Leveling Up”
In this stage of growth you are working to take you practice to it’s next level. Typically this would occur when you have filled your own practice and caseload; but not necessarily. What this stage usually encompasses is forming a group practice and adding other clinicians. It could also mean adding additional services like group therapy, mediation services or consulting.
In a typical therapy or counseling practice, a clinician gets paid for their time; time for money. So there are two ways for a therapist to increase their income with this model. One, is to get more clients to see. Two, is to increase rates; more money per time spent. “Leveling Up” means being able to get more money for the time invested. It also means being able to add forms of “passive income.”
With the “time for money” model you can certainly find things that will bring you more income for the time spent. For example, group sessions and other services that pay you more per hour. An example of this would be mediation services or some other form of consulting.
Tip: Look into your State’s requirements for being certified as a family mediator. Most States allow for therapist to do this if they have received the training. Other things to look into are other clinical specializations not offered in your area.
The other form of income is what is referred to as “passive income”. Passive income is when you received income from things in which you do not have to trade your time for money. Or it is something you have either already put the time into or some sort of product.
Adding other clinicians or forming a group practice is a form of passive income. With this you could either sublease your office space, have them as a contracted therapist (1099 provider) or have them as an employee (W2 provider). You can check out an article on this here.
Other forms of passive income would be to sell products or online services. For example, writing a book is a form of passive income. You put the time and effort into writing the book and it then brings in money for you once it’s on the market.
Tip: Look into offering books and products that you recommend to clients through the Amazon Affiliate program. Amazon will pay you a commission, at no extra cost to the buyer, for things you recommend on your website. It does require knowing how to insert affiliate links on your website, which is pretty easy to do for most websites. Another idea for passive income is to offer online courses that people would pay to take.
The main thing to think about with expanding and leveling-up is that with the “time for money” model, there is a maximum you can reach. You can only charge a certain amount and there is only so much time in a day. So to take your private practice to a higher income level, you do need to diversify your income and have multiple streams of income coming in.
Maturity and Retirement
Depending on your age this is a stage that may or may not be on your “radar screen”. Once you have built and expanded your practice and you are also at the income level you have aspired to, what next? As much as anything, this stage requires you to think about your long term goals. Where do you see yourself in relation to your practice 10, 20 or 30 years down the road?
The main thing with this stage is that you are planning for it now. Certainly, you will need to think about retirement investments like an IRA or other retirement investments. Other things to think about is what will happen to your practice when you decide to no longer see clients? Who and how will this carry-on if at all?
Tip: One investment opportunity to look into is in buying an office location vs. leasing it. It might be easier than you think. For the most part, investing in real estate is nearly always a good investment if you get it at the right price. It will not only give you some additional control of your practice, but also increase the value of your practice.
There are any number of ways to set things up for the future. One is to have the practice “run itself” so that you continue to get income from it without having to actually see clients. This can be done if you expanded well and have other therapists seeing people. This could be done even before or after retirement. It’s the ultimate passive income.
The other way is to sell your practice to someone else. The clients that you see and the referral base that you have has a value. It is how doctors, dentists and other professionals do pass their practices on.
This is why it is important to have your practice set-up in such a way that could be sold or carry-on without you being there. Afterall, regardless of what stage of growth you are in now, you have and will have invested a lot, both monetarily and in your time and effort. So setting things up so it all is “transferable” will add to the value of your private practice. Some business and financial planning will go a long way in helping with this.
The other thing that needs to be planned for is what would happen if you were to become disabled or incapacitated in some way. Again this is where planning comes into play. Having disability insurance and life insurance is a smart choice to help with this problem.
Tip: Talk with a financial planner, accountant or an attorney about forming an LLC or other entity to protect you and your practice. Forming an LLC is really a pretty simple process and will create “legal entity” to separate you from your practice. You still have all the control, but it prevents someone from coming after your personal assets if for some reason you were sued. A service that does this very economically is Swyft Filings (this is an affiliate link; I do receive a commission if you buy at no additional cost to you). The other advantage about forming an LLC is that it does make selling your practice easier if you were to ever do that.
Regardless of which stage you are in, dreaming,starting, growing, expanding or slowing down, private practice as a therapist, counselor, coach, or other mental health provider can be so rewarding. The stage you are in helps you determine where to put your energy and effort. It is absolutely possible to have a lifelong career in this field without burning out. Private practice let you be your own boss and have your own business that will support you and your family.
By L. Gordon Brewer, Jr., MEd. LMFT – Gordon is the President and Founder of Kingsport Counseling Associates, PLLC. He is also a consultant and business mentor at The Practice of Therapy. Follow us on Twitter @therapistlearn and Pinterest “Like” us on Facebook.