Most anyone that has gone into private practice as a therapist or counselor remembers their first client. It is always an exciting thing to get that first paying “customer” through the door. And it always seems like number two, three and four, etc. are the ones you have to work the hardest to get.
Growing a private practice does take a lot of work. Those beginning stages do require a lot of hustle. It is the kind of hustle though that feels good and exciting because you know it is leading to something that will be rewarding and somewhat liberating. Being self-employed has a lot of ups and downs. But once you get the momentum going, things quickly fall into place and you can be in your dream job.
Investing in the Practice
Hopefully most people know that just by “putting out your shingle” does not get you a full practice from the start. It is something that has to be built over time. So it makes sense that you will need to allow yourself the time and patience needed to build a practice.
It is also very important to not be totally dependent financially on a growing practice. Unless your already have a large enough cash reserve that you can draw from, a smart way to go is to start part-time with your private practice. In other words, keep your “day job” AND see clients part-time while the momentum builds.
While you are growing, take the income you are getting from the private practice to use reinvest and/or build a cash reserve. Ideally it is a good idea and practice to have at least 2 months of your total practice income and expense (salary, office expenses, etc.) in reserve for yourself. So for example, instead of paying yourself, you would put the money made by your private practice into a savings account. Ideally do this until your practice is full and you make the transition into going full time.
Growing Your Practice
Of course there are a lot of things that go into building and growing a successful private practice as a therapist. It takes a lot of cultivating and diversifying of referral sources. More than that, it also requires knowing your business landscape and tracking your progress.
Developing Referral Sources
There is no doubt that the engine that runs any successful private practice are its referral sources. Depending on the type of practice you have and your niche, referrals can come from any number of sources. Referrals come in two basic forms. They are either referrals from other professionals or self-referrals.
The first thing most people think of with professional referrals would be referrals from doctors or other healthcare professionals. The best way to cultivate this type of referrals is to simply be known by the doctor or other professional. Most doctors keep a list of therapists and counselors that they regularly refer to.
Create flyers or rack cards to take to the health care providers in your area. Use something like a coordination of care form to send to the primary care doctors of current clients. Have clients sign a release to just coordinate with their physician and send the form along with a practice flyer letting them know you are accepting new patients. This has been one of the best marketing tools I have found for me in my practice.
This type of referral is usually going to be your biggest source of referrals. And to do this well, you have got to have a good website. Obviously, when people are thinking about seeking counseling or therapy, they will usually Google it first. Your website needs to make it easy for people to make an appointment and know how to connect with you.
Tip: Make sure your contact information, phone, email, etc. is highly visible and one of the first things they see when they visit your website.
Other places people will go to when self referring are with their insurance plans or other directories. (Being on insurance panels have several pros and cons. You just need to weigh out for yourself the cost/benefit for you in your practice)
Having a listing in the Psychology Today directory is a good ROI (return on investment) for clinicians in most areas. The $30 a month cost will most likely pay for itself within your first month.
What is your “full”?
A full practice could mean different things to different clinicians. One of the clinicians that works with me in my group practice only wants to see private clients in the evenings two days a week. So full for her is 5 clients. So when you think of “full”, for some, it is purely schedule driven.
I think for most people though, it is a dollar amount based on how many clients you need to see for a certain rate to get to your financial goals. In getting from zero to full you do need to have a clear picture of your numbers and financial goals. For example:
$50,000.00 (a year to cover salary, business expenses, taxes, etc.)
÷ 48 (number of weeks seeing clients)
= $1042.00 (amount needed each week)
$1042.00 ÷ $100 (per session rate) = 10.42 (sessions per week)
If you charged $70 (per session rate) you would need to have about 15 sessions per week, etc.
Tracking your progress
Once you know your “full” you can begin tracking this. Of course the thing to take into account are cancellations and no shows. Unfortunately people do need to change times or just simply cancel. You can keep this to a minimum though by having clear cancellation/no show policies in place, but that is not full proof.
That’s why it is a good idea to have more appointment slots than you need for the week. So if you need a minimum of 15 appointments per week to meet your financial goals, put 20 slots on the schedule to fill.
The other thing to track are repeating and returning clients. If for example you tend to see established clients once a week, in theory you would only need 20 clients to be full. If you tend to see most clients every other week, you would need 40 clients to be full. So as you are tracking you will need to take into account not only the number of appointment slots to fill, but also the number of clients you have on your caseload.
Ways to track
The simplest way to track anything is to set up a spreadsheet to follow your data. As you start to get clients, track your numbers using a spreadsheet. What you will want to track are:
- The number of visits per client (length of stay)
- Your per session rate
- Office expenses (AKA overhead) which will be things like rent, utilities, etc.
- Re-investment into the practice (profit from the practice you do not pay yourself)
It would also be a good idea to invest in an app or other software to help you track all this. One resource I can recommend is FreshBooks (affiliate link). It is a cloud based accounting software that is designed specifically for small businesses. It allows you to create invoices, track your income and expenses, write checks and pay your bills.
Another place to invest would be to maybe get a practice management system specifically for mental health providers. You can find a good list of these here. Currently, I am using TherapyAppointment.com which is what I started with when I moved into private practice. And there are others out there like Simple Practice, Thera-notes, etc.
Growing a private practice does take some time and patience. Getting to “full” is going to vary depending on the number of sessions you would like to work, what you charge per session and the amount of money you need to pay yourself and pay for your office expenses.
It is also important to not be totally dependent on just seeing clients as a way to bring in income for yourself. This is where learning to diversify your streams of income can be helpful (see the blog article on this). Having multiple streams of income keeps you from “putting all your eggs in one basket”.
Also put an emphasis on reinvesting in the practice, especially in those beginning stages of your practice. It is important and wise to have a buffer to help keep you going during those times when you practice might not be completely full.
Private practice as a therapist is very doable with the right planning and foresight. Learn as much as you can about business and marketing to help boost your growth. Then you will be able to go from zero to full in no time!
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. “Like” us on Facebook.