Expanding into Group Practice: Does it Make Sense?

*Last Updated 8/1/19

You’ve looked at all the options for growing your practice. You could work more hours and see clients yourself, add in group therapy work, intensives or some other service, you could add online streams of income or you could start adding clinicians to your private practice and begin expanding into a group therapy practice.

A group practice could be an amazing source of income for you now and in the future. A successful group practice doesn't just happen, it requires thoughtfulness, and great planning to ensure a healthy, happy transition. We want to help you explore the possibility of expanding into a group private practice and avoid some of the common missteps that people make

Group Practices Can Be Tricky

We actually coach a lot of group practice owners. We love group practices and think they are a great way to provide easier access to services for your community. But we really love group practices that run well. Did you know that some therapists make less running a group practice than people running a solo practice? They work longer hours, spend more time marketing, sometimes spend just as much time with clients, they lose out on sleep... and they may not be making money.

3 Common Missteps in Group Private Practice

There are 3 major areas that need to be tackled if you want to be sure that building a group practice makes sense for you. Processes, Leadership and Financials. Sounds so riveting right? But the truth is, these three things are very important and yet often overlooked when group practice owners get started. Then they end up coming to us to help them fix the potholes in their practices. Which, we are happy to do, but we would rather help you avoid the issues now.

Processes in Group Private Practice

Take your processes that you have in your individual private practice and multiply the work load. What if you had double the calls, triple the emails, or quadruple the tasks? Could how you handle those things now, bear the weight of the increase? Any process you have as an individual that isn't rock solid is going to get bigger when you expand into a group practice. In fact, some processes that worked just fine as a solo-therapist won't translate effectively into a group practice. Before you bring on another employee- be sure to get your practice as streamlined as it can possibly be. A secondary benefit of this is that you will actually improve customer service and your clients will get more time with you! 

Some of the processes to consider are your intake process, file management (documentation, follow up and discharging), team communication, and marketing. These will shift when you add more clinicians into your practice and YOU cannot be the end all be all to get things done. You will need to outsource more, delegate and eliminate tasks that are not helpful to the business any longer. Start documenting your processes now, even if you are just considering a group practice. It will make a world of difference as you train up the therapists you hire and it will help you find the gaps in your current processes now.

Leadership in Group Practice

A leader, directs and guides a group of people towards a shared vision or goal. Too often group practice owners just focus on doing a group practice because they want the income increase. Never go into private practice just for the money. While you can make a great profit running this structure of a private practice, you need to care about the people you serve and those who work for you. Consider how you communicate, your personality, your strengths and weaknesses when it comes to running the business and ask yourself if you are willing to take on the responsibility of having people rely on you. More clients will be calling hoping you can help and more clinicians will be turning to you, in expectation that you have work for them. Can you feel confident about being there for them, even if it isn’t perfect, showing up for your team and the community you serve?

You need to be honest about how much time it takes to market additional people in your practice, how your caseload might shrink, and calculate the top and bottom income of each group member. While having an employee who can only take 5 clients might make you feel less anxious (easier to fill) it also limits the ROI you can get from marketing this individual. Also, depending on the supervisory needs of the individual- I've talked to MANY therapists who realized they were LOSING income on employing people. (which is why we are going to talk about financials next!) Make sure you have a clear system and you have all the numbers in your handy-dandy business plan! Don't have a business plan yet? That’s where bootcamp can help!

Sometimes group practice leaders discover their time is spent more in leadership and running the business than in providing clinical services. That is perfectly a-ok AND you need to start planning for that now. Maximizing and making room in your schedule (not necessarily adding work on weekends or nights) to allow for this transition to happen is key.

Financials in Group Practice

This is where a lot of people want to start. They start to think, they can hire someone, pay them less and take a part of the fee for themselves and viola - profit. YES BUT…here are some missteps to avoid when working on the financial aspect of group practice.

Don’t put your employees first

We are not saying not to care for your employees- but you need to take care of YOU too! This means taking care of your energy needs, your financial needs, your space needs, etc. If you aren't healthy and happy in your private practice and doing well financially- it is impossible for you to create a happy, healthy, sustainable practice for your group. Set processes and boundaries in place that work for you and your life. Then hire people for whom that is a good fit.

Don’t put your employees last

Ok... We are being a bit silly. However, we've seen therapists who employed other therapists and never ran the numbers. What do I mean by that? They are literally paying their employees below the poverty wage, but expecting them to do amazing work. Your employee can't do great work consistently when they are worrying about paying the bills. You need to create a scenario in which everybody is happy and healthy. And yes, this includes if you are employee pre-licensed therapists. Remember, someone who has completed their degrees can't live on student loans anymore- they are expected to make a livable wage and start paying BACK loans within 6 months! How you pay your employees is reflective of your values as well. Please don’t be a group practice that contributes to the statistic of us being the worst paid masters degree.

DO Really Calculate the Return on Investment

We talked about calculating return on investment for therapists previously. Calculating return on investment in a group practice is much trickier. We wish we had an easy calculation for this one. We developed a fun excel spreadsheet for the Business School Bootcamp for Therapists for our group practice therapists because it can get pretty tricky. It takes into consideration not only your financial situation but options for paying with benefits, pay scales and expense projections for group practice.

You do need to sit down and look at not only the time and energy it will take you to build a group practice but also the resources and their costs. Sure you can add a clinician but they have expenses as well to add them to software, the phone system, tools for outcome tracking, just to name a few examples.

Simple ROI for Hiring One Therapist Into Your Practice

Now- let's do a simple ROI for someone who is hiring just one employee. Let's say that person is bringing with them 3 weekly clients at $125 a session ($1500 a month gross). The goal is 20 hours per week, and the owner of the practice needs about 5 hours a week to market and provide oversight and training to this person- hours that mean dropping down their caseload by 5. 

Monthly expenses for worker's compensation, payroll, payroll taxes, etc. are about $125 a month. Even though it looks like there is more $ coming in-without expanding past 3 clients- this is actually still a loss- because the owner could be seeing 5 clients a week at $150 a session ($3k per month). If the split is 60% to the employee and 40% to the owner ($50 a session to the employer) at 3 sessions a week there is a loss of $2,525 for the owner! 

The employee needs to be seeing about 16 clients per week to break even. If the employee is seeing a full caseload of 20 clients the additional "passive" income would be about $800. Of course, over time, the 5 hours a week may reduce as things become streamlined which would create a bigger return on the investment of time you put into training and marketing your employee! 

Hear what others say about starting a group private practice.

Don’t just take it from us, we have some great advice from 3 successful group private practice owners. Each has a unique practice that works for them. Some are small, cash pay only and others have multiple clinicians, taking insurance and/or government contracts. No matter the type of group practice, the lessons are important for all of us.

What is the best thing about owning a group practice?

The best thing about owning a group practice is being able to build the brand and your office culture you've envisioned or wished you had when working for others. Being in alignment with your value base both on the clinical front and how employee's should be treated is very fulfilling. Plus the thought of making money when you are not in the chair is exciting. - Wendy Jensen

I have more time with my kids and my family without feeling stretched thin and enough income to be able to afford to splurge on the things that I wanted to for my family and myself (family vacations, a small cottage on a lake, and time for me to exercise every day without having to compromise on sleep or family time). This was the actual image I had in mind when I thought that being a psychologist would be a good career for me, though group practice ownership for me, initially, was very, very different. - Kris Boksman

The best things about owning a group practice is the ability to serve more people in the your community, it creates passive income, and it decreases clinical burnout. When I was in solo practice, I was seeing 10-12 clients a day during the two days a week I had child care to stay afloat financially and I was feeling overwhelmed with billing tasks and keeping up with progress notes. Once I branched out into group practice, I was able to have another baby, take a maternity leave, schedule admin time, and make money. -Kari Ann Greaves

What are you currently working on to improve your group private practice?

I'm currently working on all of my processes. I am not afraid to take big leaps and try something new such as starting a group practice, but I was ill-prepared for what needs to be in place for a group practice to run smoothly & efficiently. Follow the boot camp guidelines and you'll be grateful you did:) - Wendy Jensen

I am working on streamlining our systems in the practice so that we can manage practice growth. Having systems in place makes it easier to bring on new therapists to work with clients, improves communication amongst the group and admin team, and provides less anxiety when you are not in the office. - Kari Ann Greaves

I am currently revising all of our policies and procedures, paperwork, information handouts, and finishing up the onboarding of a new clinic receptionist and admin assistant. Over the course of this year I have been improving on making better regular contact with my clinicians, communicating more effectively, and predicting the flow of clients in and out of therapy rosters more accurately. -Kris Boksman

What advice do you have for someone considering group private practice?

Be ready for any of your "old stuff" to materialize in your efforts to lead and manage a team. I was completely shocked to recognize that family of origin issues that I had been able to attend to sufficiently for healthy relationships with my immediate family were impacting me quite significantly as I took on more growth and leadership at my clinic (or, it may be more apt to say as I avoided taking on more growth and leadership). My personal issues re-emerged in this context and I needed to take some time and initiative to smooth out these wrinkles, meaning consultation, asking for \lots of support, decreasing my caseload to take good care of myself, and returning to therapy to sort it all out. I had experienced trauma during my early years and I was honestly quite surprised at what a bumpy ride this was, though looking back I am grateful for the growth I have experienced in the process as I am a more confident and capable leader now. - Kris Boksman

Get your ducks to have in a row before launching your group practice: 1) marketing of your practice name and seeing a sustainable call volume for both you and therapist(s). 2) Make sure your business savings accounts are well stocked to support the growth and the window of time you’ll need to step back your caseload to manage the practice until your therapist(s) caseloads are full. This will keep your stress level much lower as you work through the growing pains of this adventure. 3) Set clear expectations for your employee’s from the start. Write up any onboarding process, and as it unfolds, take notes on what does & does not work well. - Wendy Jensen

My advice for someone considering group practice would you be to research running a group practice, discover your purpose for building one and to schedule your clinical time and administrative time. It's really easy to find yourself working all the time day and night when building a maintaining a group practice and this can be really draining for you and your family. Also, don't try to do everything yourself, outsource admin tasks that you don't like and hire an assistant to help you with the intake process. -Kari Ann Greaves

Is Expanding Into Group Practice For YOU?

Wow... this isn't feeling so simple is it? Running a group practice is fabulous and powerful, but many therapists expand without running the numbers, establishing a solid individual practice with processes and systems that work and are scalable, and without understanding what is required of them as a leader. Realize that you are becoming an employer, and that there are a lot of things to consider to ensure you sustain the work/life balance you need to be joyful and happy! 

Are you already in group practice? Share your advice below. If we get enough group practices sharing advice below- we might even feature you in a future post! Do you have questions about expanding into a group practice? Share them below!