Part I. Healthy Private Practice
Your private practice is the core of your financial plan. Why is it so important? Because it's where your earnings come from! And at many stages of your career, your future earnings are your largest financial asset. In fact, it's not uncommon for the the value of your future earnings to be larger than all your other assets combined.
The bottom line is that your future earnings are a really important financial asset. And most financial planning just sorta assumes earnings will steadily grow until retirement. That type of thinking might work ok if you worked for some large corporation. But you don't - you work for yourself!
As the owner of your own practice, you get to call all the shots. And a lot of those shots determine how hard you'll have to work and how much you'll earn doing so. That's a lot of freedom and empowerment... and it can also feel like a lot of pressure.
As a recovering MBA student, thinking through small business challenges & strategies is one of my favorite parts of being a financial planner for therapists.
When it comes to your private practice, I think there are seven core areas to work on. Don't let the breadth of this stress you out! You don't have to do it all and you don't need to do it all perfectly. And this framework is a tool to help you feel less stressed out: you will know that you've thought through all the important pieces.
Here are the seven components of my healthy private practice framework:
- Pricing your services
- Sales & Marketing, including your all-important website 😎
- Finance & Accounting, including tax management
- Operations, including regulatory compliance
- Human Resources (managing employees)
- Risk Management & Insurance, including business entity choice
- Strategy & Business Planning
I love all these areas, but strategy & business planning is perhaps my favorite. It includes helping you answer questions like: Where do you want your career to go? Do you want to expand your services and impact beyond traditional therapy? Could you potentially sell your solo private practice?
You'll find details on all seven of these areas in the Resources section below. 👇
Progress not Perfection!
Please don't feel pressured to get all of these matters handled perfectly or immediately!
These resources aren't recipes for how to begin. Rather they are suggestions for you to consider. They will help you decide how to tweak and improve your practice such that it betters serves both you and your clients.
Managing your private practice is just like managing every other aspect of your financial life. It's a journey. And that journey is a marathon, not a sprint. 🙄 I know, I know, you're rolling your eyes... so cliche. And yet it IS really true.
Every element of financial planning, including managing your private practice, is about progress rather than perfection. Slowly and consistently making incremental progress over time will yield huge dividends.
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The Power of Categorizing Your Practice Responsibilities
I love categorizing and organizing things. It's how I make sense of the world, feel centered and make sure I'm managing all the different areas of my life properly. I mean like this picture of the perfectly organized colored markers! It sorta makes my heart sing. 🥰 That's all normal right?!
Regardless of how your mind works, I believe organizing things into categories is helpful. It helps prevent overwhelm and ensure balance. A huge laundry list of things to think about in your private practice can feel hopelessly overwhelming. Breaking things down into a handful of categories, each of which have their own priorities, usually feels a bit easier.
Further, seeing things in different categories helps you balance all the important areas of your practice. Have you been killing it on the finance and accounting front, but haven't given a thought in months to your practice's regulatory operations? Categorizing can help your more easily define what your next (most empowering) steps could be.
Healthy Private Practice Resources
Click on the orange section headings to expand
Pricing your services is of course a HUGE topic. If you're just getting started in private practice, you might be wondering how do you pick a fee that's right? If you have a roster of existing clients, you might be wondering if you could (or should?!) increase your rates. And if so, how would you go about doing that?
And there's a second issue lurking here: how much do you want to work? As I talk about in the Life Planning section, you need to determine what level of financial support you want your practice to provide for you. And then you need to decide how large a space you want your practice to occupy in your life.
With all that in mind, here are some articles and other resources that will help you navigate this tricky area of practice management.
I talked about this on the Life Planning Page, but I'll list it again because I think it's so great. Tiffany McLain's Fun with Fee Calculator is a great place to begin. It will walk you through setting a fee that will provide you financial support for the life you want to live. And it will help ensure you create the work-life balance you need.
While I'm at it, really all of Tiffany's content at Hey Tiffany is helpful when it comes to wrapping your arms around setting fees at the right level. And be sure and check out her podcast The Money Sessions. Her interviews are truly inspiring, and they cover content from mindset all the way to the operational details of actually raising rates. (Yikes, potential uncomfortable conversation with client alert! 🚨)
a few more resources for good measure:
Selling the Couch podcast episode: A Deep Dive on Setting Fees
Blog article by Annie Schuessler: How to Set the Fees for your Therapy Practice
Recorded webinar hosted by financial therapist Lindsay Bryan-Podvin: How to Set Fees in a Therapy Private Practice
Blog article by April Snow, LMFT: How Many Clients Can I See Before I Get Burned Out?
YouTube video from Dr. Marie Fang: Setting Your Rate in Private Practice
Sales & marketing is a pretty expansive area. So much so that I created a page dedicated to the stuff.
Check out the Sales & Marketing Page. (And yes, we definitely cover websites here!)
Since I am a financial planner, you might not be exactly shocked to learn I have a fair amount to say on this subject. So, yah, I created a dedicated page for this subject.
Check out the Finance & Accounting Page!
The operations and regulatory category is about two things. First, it's about running the administrative aspects of your practice in an efficient and effective manner. Second, it's about ensuring you stay compliant with HIPAA regulations, as well as any other regulations and guidelines you're subject to.
I'm not a regulatory expert. You might not be either. And that's ok! So much of regulation is just carving out some time on a consistent basis to think about these matters and do what you can. And, like all areas of financial planning, be sure to focus on progress rather than perfection. Continually making progress in the regulatory area of your business will set you up for long-term success.
Let's Talk about HIPAA
This post from Gordon, founder of the Practice of Therapy, on HIPAA anxiety offers a great primer. Gordon also suggests checking out Roy Huggins of Person Centered Tech for some really great courses and information on this whole topic. Gordon also recommends an episode of the Practice of the Practice Podcast where Joe Sanok interviews Roy.
Need a refresher on personally identifiable information (PII) and protected health information (PHI)? Check out this blog post.
I'll add more here as I discover additional resources. And if you know of great ones, please let me know and I'll add them!
An EHR system is something that might end up making your administrative processes both more efficient and more compliant.
An EHR isn't an end all, be all and I know very successful practice owners who don't use them. And yet adoption seems to be increasing rapidly. In many ways it make sense. Why not pay a fairly reasonable monthly fee if it really frees up your time (and headspace) to focus on more important matters?
You can check out my Resources Page for a list of EHR systems you might consider.
I also found this post on how to choose an EHR. The article is geared toward Speech Language Pathologists but I suspect you'll find a lot of the information is applicable to your private practice. There you can also register and receive a free comparison guide.
You want to be cautious when it comes to corresponding with clients over email. The primary concern is making sure that information protected by HIPAA is stored and transmitted in a compliant and secure manner. If you're using any form of free email service, chances are that email is not a safe way to communicate with clients.
The Practice of Therapy provides a useful overview of how to use Google's services in a compliant manner. Gordon also offers a course on using Google's G Suite in private practice.
Human resources really means how to be a better employer. Hiring employees, whether fellow licensed professionals or staff acting in other capacities, can amplify your positive impact in the world AND grow you personal income. Sounds like a great idea, but yikes, can hiring and managing people be intimidating!
Julie Herres provides a great overview of what ideas to keep in mind when transitioning from a solo practice to a group practice in this episode of the Therapy for Your Money podcast.
The Group Practice Exchange also provides this guide on Transitioning from Solo to Group Practice Ownership.
And of course I'll continue to add resources in this area as I come across them! Have a suggestion for me to add? Please let me know!
Expanding Beyond the Couch
If you're thinking about expanding beyond traditional one-on-one therapy, you're in luck because there are a bunch of fellow travelers who have made that transition and are sharing the details of their success. Here are a some resources to start planning your next professional adventure.
Building Your Ideal Private Practice. This book is Lynn Grodzki's really excellent resource on how to build a practice which suits you. Lynn also offers business coaching for therapists in private practice..
Million Dollar Private Practice. This book is a great overview of different strategies and techniques to really grow your impact and your income. It's full of intriguing and perhaps even some unconventional ideas.
Melvin from the Selling the Couch podcast also talks a lot about how to expand your impact beyond traditional therapy. Definitely a lot of resources, guides and thought-provoking conversations to check out there.
Selling Your Private Practice
Yes, you may be able to sell your private practice, even if you're a solo clinician. It is not a quick or simple process, however. To get the best result likely requires several years of preparation. For a great introduction to this, see Lynn Grodzki's book Building Your Ideal Private Practice.
Here's also an interesting article from Thriveworks with some ideas to consider. Given the source, it may not be 100% unbiased and yet it does offer some perspectives worth considering.