Ok... let's start by saying this: Private Practice is not a get rich quick scheme. This article isn't about making 40k in 2 days, or being salesy, sketchy, or unethical in the name of building your private practice.
But, some of you are struggling financially. And that struggle is making it difficult or impossible to maintain being in private practice and working with the clients who desperately need you. Or, at the very least... not making a decent income is making you seriously question your life's work, or making you feel burnt out and exhausted and it is sucking the joy out of the work that you love. You might need to make some changes and some decisions to get money flowing in your practice in a more meaningful way. And let's be honest- you might need it to happen relatively quickly.
What is Profit in Private Practice?
Ultimately, as a business owner you have to look at the profit of your business- or the income you make after accounting for expenses (and taxes). Your accountant will ask for "profit and loss" statements when they do your taxes. And for you to know how your business is doing you can't just look at how much income is coming in- you have to look at the big picture.
Unfortunately, many therapists don't create a business plan, or take into account all the expenses related to being a business owner. So, for many therapists in private practice- their take home income in private practice is unsustainable. In fact, some therapists believe private practice is something that is for people who have a spouse or partner who can be the financial breadwinner.
For your private practice income to become sustainable and allow you to keep doing what you love- you need to create a business plan asap. Why? Because if you bring in tons of clients, but you aren't charging a fee that allows your business to be profitable- you won't be able to sustain this. In fact, growing your private practice when you are undercharging can be MORE difficult and lead to more headaches! (I know you might not believe us- I could give you all the reasons why- but that would be a WHOLE blog in itself! Feel free to come to our next free training and we can touch on it for sure!).
The hourly fee you charge has to take into account business expenses, taxes, no-shows, vacations, holidays, sick time, license renewals, CEUs, trainings, consultation, retirement, time for marketing your business, time for managing your business, and so much more! Your hourly fee in private practice is in NO way related to your old hourly wage at a non-profit! You are a business owner now, and you need to start thinking like one!
One of the biggest mistakes we see therapists make in private practice is not being realistic about the costs of doing business. No matter how careful you are about expenses- if you haven't created a realistic business plan- you are going to be struggling financially.
A Bit of Powerful Math
During our free how to set fees in private practice training for therapists we do a little math that almost always shocks therapists. Did you know that if you see about 20 clients per week, and work 50 weeks a year, that every $10 change in your fee equates to a difference of $10,000 in your annual gross fee?
That means if you slide your cost down an average of $20 per client, you are losing $20,000. And, that raising your fee even $10 can equate to a difference of $10,000 in gross income. Little decisions can add up to big changes in income- for good or for bad.
Get Real About Money
The first thing you need to increase your income is to get honest about your financial situation, how much you really need to be charging, and start charging that fee with confidence. Therapists in our Business School Bootcamp for Therapists are constantly surprised that when they take care of their money fears and get confident about their fee (and how they developed it)- money gets easier, and they have more clients who pay their fee.
Get real about what insurance contracts you might need to say goodbye to, and make a plan to increase your fee to something sustainable if you realize your fee isn't allowing you to be happy in private practice.
Get Real About Marketing
Once you get your business plan aligned, your fee aligned, and your current money situation resolved- NOW you have time to market your private practice and focus on bringing clients in that you can deeply help, and that fits the needs of your business. Many of the therapists we work with tells us that they feel re-inspired to work on their business once they understand the big picture and it feels less overwhelming- they know exactly what needs to happen to have a profitable business.
Remember, your fee needs to allow you TIME to market your private practice. Even if you ultimately wanted to spend 40 hours in the office,- your hourly breakdown might look more like this:
- 19 client sessions
- 2 hours of billing
- 1 hour of bookkeeping
- 3 hours of phone calls
- 5 hours of networking (coffees, groups, trainings, etc.)
- 5 hours of online marketing (websites, social media, etc.)
- 3 hours of creative time, self-care
- 2 hours of progress notes, treatment planning, or consultation
Have you done a breakdown of the tasks that are required to have your practice running smoothly? It may seem like the last thing you need to do to get your income flowing. I get it. It doesn't seem like the best use of time. But you might be surprised at how not being real about your time and your schedule might be getting in the way of you having time or energy to market.
What Really Works?
It is important for you to know that creating the most effective marketing that is going to bring clients to you and build a profitable private practice is a very individualized experience. A lot of therapists are spending 20 hours a week on Facebook groups reading about what everyone else is doing- and then getting overwhelmed and exhausted trying to implement everything. Building a profitable private practice that is going to make you happy and have a significant impact in your community takes focused, impactful effort. You can not do everything. Or, even if you can do "all the things" you can't do them all well!
Therapists implement so many marketing strategies to connect with clients and bring in income. However, most therapists aren't sure how to determine what is working and what isn't. So they can end up stopping marketing activities that are bringing them referrals, and spending time on things that aren't a good fit for their practice. During bootcamp, when we show therapists to track what is working, what isn't, and how to determine the return on investment not just from paid advertising but for their time- it is a game changer! They finally realize what they can let go of and what they can put more energy into so they can spend LESS time marketing, and have more income coming in!
So How Do You Increase Income Stat In Your Private Practice?
So let's do a quick recap on what needs to happen to get income flowing in your private practice.
- Develop a business plan
- Calculate a fair fee that allows your business to be profitable
- Charge that fee to new and existing clients
- Implement marketing that works for YOU and YOUR clients
- Track, Assess, and Streamline Your Marketing
Join us for the 6 week Private Practice Challenge. Our first training week 1 will be about How to Set Fees in Private Practice. Sign up and join the challenge here!
Looking for long-term mentorship, coaching, and direct guidance of growing, starting, or redefining your private practice? Check out our Business School Bootcamp for Therapists that has helped hundreds of therapists from all over the world build happy, profitable private practices that are changing the world one client at a time!