7 Factors That Affect Private Practice Income

Maintaining a successful therapy private practice takes a lot of time, effort, and skill. There are countless aspects of your business that require painstaking attention in order for things to run smoothly. It can be difficult to work so hard and still sometimes experience economic uncertainty, so it's important to analyze the causes of financial inconsistencies. Here are 7 factors that affect private practice income: 1) Client Retention Rates     

The ability to keep a client engaged in meaningful and helpful therapy is a learned skill that greatly impacts your private practice income. It doesn't get as much attention as generating new referrals, but in my experience it is equally important. While it would inappropriate to continue seeing an individual who no longer needs or desires therapy, keeping clients committed to the therapy process and attending sessions regularly not only helps them adequately work through their struggles and meet their goals, it also helps practitioners maintain their business. Conversely, clients who prematurely discontinue therapy put both themselves and their mental health professionals at a disadvantage.  

2) The Number of New Referrals   

Acquiring new clients is of course an excellent way to increase income, but it can be hard to predict the ebbs and flows of exactly when new individuals will seek your services, so it's not a guaranteed strategy. I have found that it's helpful to begin tracking the number of new referrals and then chart them so you can anticipate and prepare for business lulls in coming years.

3) Economic Climate        

The general state of the economy can greatly impact whether clients will go to sessions as often or are willing to pay out of pocket. For some individuals, therapy is considered a necessity, while others may be view it as a luxury. Your income as a practitioner is in part dependent on the current economy of your community and state.

4) Season/Time of Year     

The time of year can affect when current and/or potential clients ramp up their therapy time, as well as when they often take breaks. In my experience, the last two weeks of December is when everyone (clients and providers) take time off for the holidays. Just as with new referrals, tracking the dips in client numbers can help you save for those times when you will not be getting paid.  

5) Fee Collection

You may have a steady stream of clients, but your income can be significantly lowered if a number of them have outstanding financial balances. How much money do people owe you? Are you good at collecting your fees? If you work with insurance companies, are you able to get reimbursed in a timely manner? All of these play a major role in the financial stability of your private practice (click here for how to set high expectations and create firm financial policies).

6) Moving Office Location        

Relocation will almost certainly affect your private practice income. Depending on how far you move, it can take time to develop relationships, create a strong web presence, and acquire referral sources for therapy. Even if you are moving to another location in the same city, you may find that this may temporarily impact your client hours.

7) Leave of Absence/Taking a Vacation       

One of the biggest complaints I hear from private practitioners is that if they are sick and have to miss a few weeks, they are left without an income. Taking some time off from seeing clients means we are not getting paid; understandably, this can create financial concerns.  

These and other factors (some within your control, others not) can greatly affect how financially stable your practice will be. And as one of my goals is to help therapists experience income stability, I again strongly encourage you to pursue multiple income streams as a way of advancing professionally, serving your community, and also providing for your own needs.

Click here to access my webinar about how to develop multiple income streams.

Get practice tips and blog updates in your inbox! Sign up for the Private Practice Toolbox Newsletter here.

Join my Private Practice Toolbox Facebook group and connect with 3100 therapists around the globe in 2 simple steps:

1) Click request to join the group

2) Fill out this brief questionnaire before you’ll be added to the group.

 

Evolution Of A Private Practice

This year marks my 10th year in private practice and I've spent a lot of time reflecting on and blogging about what's contributed to the growth and longevity of my practice. As I started creating a timeline chronicling the evolution of my practice, it became clear that the growth of my private practice coincides with my online presence building efforts. I don't think it's an accident that when I began actively seeking media interviews, blogging, and building my social networks that my practice experienced tremendous growth.

• 2002 Started solo private practice Wasatch Family Therapy, LLC
• 2002 Applied to participate on health insurance panels
• 2002 Started speaking regularly in the community and throughout the state of UT
• 2004 Created one page website with photo, practice summary, and contact information
• 2004 Identified that my ideal clients were likely internet users
• 2006 Resigned from all health insurance panels
• 2006 Hired another therapist
• 2008 Hosted a local TV show for several months
• 2008 Joined Facebook initially as a way to connect with TV viewers
• 2008 Practice grew to 4 therapists
• 2008 Started publishing regular e-newsletter
• 2009 Joined Twitter
• 2009 Became a regular local TV Contributor on KSL TV's Studio 5 , a top women's lifestyle program
• 2009 Started blogging weekly on practice website and JulieHanks.com
• 2010 Started actively seeking local & national media interviews on mental health and relationship topics
• 2010 Practice grew to 8 therapists
• 2010 Started YouTube Channel
• 2011 Started blogging for Psych Central's Private Practice Toolbox
• 2011 Began writing for Psych Central's "Ask The Therapist"
• 2011 Started consulting with other private practice therapists on building a practice
• 2011 First National TV appearance on Discovery Health's Secretly Pregnant
• 2011 Interviewed on National Fox News Channel
• 2011 Named #1 online Influencer making a difference for depression by Dr. Oz’s Sharecare site
• 2011 Nominated for NASW Media Award for website
• 2011 Joined Pinterest and Instagram
• 2012 Guest blogger for Dr. Oz's Sharecare and PsychCentral World Of Psychology
• 2012 15 therapists in 2 clinic locations
• 2012 Over 25,000 social media followers
• 2013 Opening 3rd office location

I challenge you to outline the evolution of your practice. What patterns do you notice about your practice growth? What wisdom can you share with colleagues about what has worked for you?

(c) Can Stock Photo

Pregnancy in Private Practice: 4 Key Questions To Help You Prepare For Maternity Leave

4 key questions to help you prepare personally and professionally for managing maternity leave in private practice.

I'm a mother of four children. My first two children were born during my educational journey and my last two were born while I was in private practice. Being in private practice provides many perks for balancing work and family life. The flexibility of being my own boss has been wonderful. However, taking time off for extended periods of time, like maternity leave, can prove to be tricky.  Unlike working for an agency, in private  you don't get paid leave in private practice,  you still have expenses to pay even when you're not seeing clients, and you have unpredictable income as you "wind down" to take time off and then build your client load back up after taking family leave.  Becoming pregnant while in private practice and planning for the new addition in your family requires some extra planning, coordinating, and saving.

How Much Time Will You Take Off?

These little babies can be a BIG adjustment. It's important to really think about taking enough time for you to adapt to being a parent to this new, little person. Dr. Jennifer Fee, psychologist from California found that one of the most helpful things was taking sufficient time off after giving birth. She suggests coming back gradually and not carrying a full load for awhile.

"Rushing back [to work] while you're adjusting to and bonding with a new baby is not good for you, your baby, or your clients. The great thing about private practice is that it's not an 'all or nothing' business. You can start practicing with a few clients rather than jumping back into a full load," says Dr. Fee.

Determining the length of your maternity or paternity leave can be extremely important in keeping your practice thriving. If you are a sole practitioner, taking a three month leave could potentially leave you with very few clients upon your return. You must decide not only how long is financially feasible but also how long works for your family and your clients.

Who will provide services to your clients in your absence?

It's important to consider who will provide clinical services to your clients while you are on maternity leave. If you are in solo practice, consider reaching out to another trusted private practice colleague who has openings to provide services to your clients while you are on leave. Make sure that your clients have the contact information of the therapist who'll be covering for you. I suggest that clients in crisis have appointments set up with this therapist before you take time off.

I recently talked with a private practice colleague who is pregnant with her third child. I suggested that she consider hiring another therapist to cover her clinical cases and also to generate income for her practice while she is on maternity leave.

When will you stop taking new clients?

You'll also want to think about when you will stop taking new clients. If you plan on taking new clients up until your leave I suggest that in your first conversation you inform them that you will be taking time off so they can have the option of seeing someone who can provide uninterrupted services.

Jennifer Venable-Humphrey, LCSW of Social Work Solutions stopped accepting new clients one month before her due date. When put on bed rest with her third child, Jennifer used Skype or phone sessions to check in with current clients that she had to stop seeing earlier than planned.

How will you cover your fixed expenses and lack of income?

Taking time off in private practice is tricky because you have to plan not only for lost income but for paying the fixed expenses of maintaining a practice while you are on leave. Expenses like rent, phone, internet, or perhaps the cost of support staff may need to be paid whether you are practicing or not.

Joseph Sanok, LLP, LPC of Mental Wellness Counseling in Traverse City, MI suggests considering the cost of being away from your family once you have returned to your clients. Sanok decided to increase his fee when his wife became pregnant. "For me, I knew that working in my practice was going to be difficult when I had the draw of a wonderful new addition. By raising my rates, it made it easier to give up the time."

I'm curious to learn more about the changes you made or creative ways that you found for your transition to parenthood in your private practice. Share those here!

10 Things I Accidentally Did Right In Building My Private Practice

As I reflecting back on 10  years in private practice I did a few things right, mostly by chance.

With a business license, professional license, and big dreams, I opened a private practice ten years ago. Having never taken a business, marketing, or management course, I have learned "on the job" how to be a small business owner. Hopefully, you can learn from what I accidentally did right and intentionally apply them as you build your private practice.

1) Start small, think big

At the time I opened the doors I was a solo practitioner. Those of you in solo practice know that means I was the receptionist, the billing manager, the webmaster, the marketing specialist...Being a "one woman show" for a few years not only taught me what it takes to run a practice, but also how to teach others what I had learned as the practice grew. My vision was to grow my practice into a group with several practitioners and over time, that has happened.

2) Grow slowly

I didn't know it then, but one of the main reasons new businesses fail is because they grow too quickly. As a mother of 3 children at the time, I was fine growing slowly so I could manage the multiple demands on my time. Turns out it was good for business too. Growing slowly allowed me to build a business without loans or going into debt.

3) Charge more than you think you're worth

From my first day in private practice I have always charged a higher fee than I felt I was worth. This forced me to deal with my own money issues, and to learn to value my own services and skills more highly. I came to understand the value of the perceived value of my services as clients assumed that I must be very skilled in order to charge at the high end of the scale for my location.

4) Think like a business owner

My family of origin tends to have an entrepreneurial mindset where self-employment, flexibility, and freedom are highly valued. This framework helped me to be able to think like a business owner and a therapist and to find an emotional place where those two roles weren't mutually exclusive. Although they are occasionally in conflict, I've found that that is a rare occasion. Thinking like a small business owner has helped me to set better therapeutic boundaries with clients as well.

5) Trust your gut

In all areas of practice, from office location, to logo design, to who to hire, to which practice software to purchase, after researching the best options I ultimately followed my intuition in making key decisions for my private practice. While the path hasn't been perfect, I can't think of one decision where I trusted my gut and regretted it.

6) Hire qualified people that you trust with your reputation

One of the scariest things in growing from a solo practitioner to a larger practice is hiring people who have the power to impact  your professional and business reputation. In addition to hiring very qualified staff, also hire people that you'd trust and train them how to present themselves in a way that builds your credibility.

7) Set strong boundaries with money

Whether it's following through with your office policies regarding collections, or saving for those dips in client numbers, I have tried to be consistent with money policies. This also applies when hiring employees. My tendency was to give away a little too much at first, because of my inexperience. I soon learned that there is a cost, emotionally and financially, to having employees, and that I deserve to get paid for management time and for holding all of the liability in the practice setting.

8) Create a home away from home

Creating a comfortable yet professional office space has helped me, and my clients, to feel welcomed and safe. I've found self-expression in my private office environment and decor helps foster a sense of safety and nurturing and creates a space where I feel at ease.

9) Integrate your passions into your practice

I have always integrated current interests and passions into my private practice. If there's a film that I really like, I'll use that with clients. More recently I've become a tech geek, so I've integrated technology into my private practice by launching an online therapy division, moving to electronic records, and building a social media following.

10) Take good care of you

Personal self care has always been high on my priority list. I've known that if my own needs were going to get met it was my job to make it happen. Whether it's scheduling exercise, bringing healthy food to work, making time for social events, or attending my own therapy, I am fiercely committed to making sure I am taking care of me. I think those habits have allowed me to energetically continue investing in my clients, my practice, and my employees without feeling burned out.

What things have you accidentally done right in building your practice? Please share so we can learn from each other!

[Video] Peek Inside An Office Overlooking A Lake!

I've had an amazing response to my call for therapists to let us peek inside your office by submitting a virtual office tour video. It's been so fun to see inside the waiting rooms and offices of other shrinks. I never realized how many therapists shop at IKEA! Our first virtual office tour is the office of Peter Hannah MA LMHC, in Seattle, WA. I love Peter's video because his warmth and genuineness really comes through on the video. And I have to admit that I am SO jealous of his view. Water is amazingly therapeutic. Thanks Peter for letting us peek into your office space!

To learn more about Peter's practice visit www.changingforgood.com

If you're interested in submitting a YouTube virtual office tour video get details here