Your private practice is a calling, something you were meant to do. We get it. But, did you know that even churches have business plans? They might call them launch plans, but they are still a business plan.
Why does a therapy practice need a business plan?
The same reason you need a budget and a plan at home. Because it takes income to buy food, pay rent, send kids to college, and to live. Your therapy practice can only help people if the doors stay open.
But I don't need to make a lot of money in my therapy practice.
I talk to therapists who are relying on their spouse's income and insurance benefits. Their spouse is, in many cases, actually supplementing therapy services for the community. Which would be fine if you were starting a non-profit.
If you are starting a private psychotherapy practice, it is considered a for-profit venture. And, if you don't make a profit after a few years- the IRS can determine that your work is actually a "hobby" and disallow any write-offs.
What if life changes?
People die. Jobs are lost. The work we do is hard. The cost of going to inspiring trainings, getting ongoing supervision or consultation (even after getting licensed), and taking time off is high. Whether you decide to save your profits, give them to charity, or buy a beautiful handbag is your business.
In today's world, it makes sense to have a back-up plan. Just because you don't have to make money in your business doesn't mean you shouldn't. It doesn't mean you should devalue your work, training, expertise, and the profession by charging a rate that doesn't match the expenses of the business or the expertise of the provider.
What is a Private Practice Business Plan?
It is a document that outlines how many clients you are going to see, your expenses for the year, your marketing plan, and projects your annual income. It outlines this for the next 3-5 years, and shows the rate of projected growth over that period of time. It includes an analysis of the clients you will serve, the competition in your area, how your services are different, your services and the pricing structure. It includes a mission statement, and so much more.
Why don't most therapists have business plans?
We were not taught how to develop business plans. When we ask colleagues how to start private practices, many of them stumbled through the process- so we replicate what they did. Unfortunately, just because someone is "busy" or "full" doesn't mean they have a profitable private practice. You can have a busy, full practice that is barely scraping by, or that isn't making any profit at all!
Your clients want you to be around.
I know you are not going into private practice willy nilly- this is a big decision! While many of your clients may only work with you for a few months, some of your clients are signing on for intense work that may take years. They are trusting that, if it is within your power, you will be around to complete it with them.
Life happens, you may have to move our close your practice for a variety of reasons. Not being able to pay the rent should never be one of them!
Looking for a template to follow? Here is a great business plan creator from the Small Business Administration.
Want something that is more therapy specific? Consider finding out a bit more about our upcoming Business School Bootcamp. We dig into business planning and help you start the process to reduce the overwhelm!
Whatever you do, if your private practice isn't where you want or need it to be, reach out and ask for help! There are great programs through Julie Hanks, Casey Truffo, Juliet Austin, Becky Degrossa, Joe Sanok. There are free podcasts, webinars, blogs, and so many people out there! There are so many people cheering you on and rooting for you to be successful! Go out there and be great!