What I Wish I’d Known Before Investing in a Group Practice

Today we have a special submission from a member of our community. We have been delighted to help this person and numerous others unravel from an unhealthy group practice dynamic. We are putting together a blog answering your questions about joining a group practice. Read this story, and then share your questions in the comments section so we can answer them in the blog series! The author is anonymous to protect their privacy. 

“A few years ago, I started my private practice. I’d set up a website, found space to sublet, started getting my name out there, and before you knew it, I was in business. It was exciting and terrifying all at the same time. I started getting some traction by putting myself out there, blogging, making graphics, and sharing content. My caseload was steadily increasing, but I was still scared that I could not grow a successful business.

Where It Started

One day, I got a call from an old professor who owned a group practice and wanted to bring me on as the clinical manager. He complimented my efforts in starting my own practice and then shared what his business could do to help me grow. It was an odd dynamic in which I felt good about receiving some recognition from someone I respected but left the conversation feeling more nervous than ever. My perception was I needed that opportunity in order to succeed, so I said yes.

About a year into being part of the business and acting as the clinical manager, I had several concerns about the way things were being done. I voiced my concerns, and some small things would change, so I felt heard and accomplished.

Being Invited In as a Partner

Some big shifts occurred at the ownership level, and it wasn’t long before I was asked to invest in the business and become a partner. I was given some numbers and spreadsheets, discussed it with my husband and a few other private practice owners, considered the pros and cons, and eventually said yes and wrote a sizable check.

Uh oh… there are MAJOR issues here!

Nothing ever went well after becoming a partner in the business. It started out with me observing and commenting on small issues here and there, but before long, I was seeing huge systemic problems. Now that I was part of the decision-making, reviewing financial reports, understanding processes, and involved in hiring and firing, I was terrified. I could see that there were major issues, but I felt stuck. I’d spent a sh*t ton of money and wanted to get a return on my investment (or at least recoup my investment), and I still held the false hope that I could turn things around if I just tried hard enough. I’m sure you’ve figured out that was a no-go.

Paying More and More Into the Business

I couldn’t make any progress on the business, and things got worse and worse. Financially, I was losing money every month, tensions were high amongst the partners, employees started leaving, there were no boundaries. It was a very unhealthy situation, and I felt scared, guilty, and helpless. Finally, I found a business coach who had an objective look at everything and got my butt moving to remove myself from this situation.

Making Change Is HARD!

The logistics were difficult, implementing boundaries was messy, my shame and guilt made it hard to make movement. But once I made steps to remove myself from the business, I felt so much better. It’s still been messy and painful, but I took control of my life and my business, and I’m so grateful for that. One of the hardest parts of the aftermath of this experience has been my desire to protect other people from going down the same road I did. I can’t protect everyone from this company or any person that will take advantage of others, but I can share my experience with the world in the hopes that my past can help other people make more intentional decisions for their future.

Here’s the things I wish I’d known so I could have made different decisions before entering into this awful situation:

Be Aware of Your Own Fears/Scarcity Mindset & Motivations for Forming a Partnership

I was aware that I was nervous about running a business all on my own, and I allowed my head trash to take over at times. I told myself that I wasn’t capable of marketing because I’m an introvert or that no one could fill a private practice with cash-pay clients, which was the business I really wanted. I let my scarcity mindset take over when discussing these decisions with the other owners, and I fell into the trap of thinking that I needed them more than they needed me. Be aware of what comes up as you’re looking at different opportunities, and if fear or scarcity is playing a role, it means you need to slow down and carefully evaluate.

Understand Your Own FOOBS

FOOBS stands for Family of Origin Bull Shit, and it shows up all over our businesses if we’re not careful. This was certainly true for me in this entire situation, and I didn’t see it until 6 months after dissolving the business (about 3 years into the situation). This experience was traumatic for me, and as I was chatting to a friend, I said something that made me realize that so many parts of this situation were old family patterns playing out again in all new ways I didn’t even recognize. Having a better understanding of my FOOBS would have allowed me to see things more objectively, and I believe some different decisions could have been made along the way.  Know your FOOBS so you don’t have to get sucked into something unhealthy without even knowing it.

Review the Business Accounting Records

Ask for the last 5 years of financial records, profit/loss statements, and ask questions about the business practices so you can understand the financial decision-making and processes. If you’re able, get a valuation of the business or ask for the company to provide a valuation. Make sure you fully understand the numbers and what you’re looking at, and if you don’t or you need an opinion, hire an accountant to help you review the documentation.

Ask Other People Who Have Worked With/for the Company About Their Experience

A good way to understand how you’ll be treated is to learn from people with experience working for the company. These can be difficult conversations, and you may not always be able to get the answers you’re looking for, but it’s smart to ask around. Learn more about the reputation of the company, get an understanding of the history of ownership and employees, ask lots of questions, turn your bullshit detector on. If there’s been a lot of turnover or issues with keeping employees or owners in place, there’s probably a reason.

Hire a Lawyer

When there’s contracts involved and business agreements, hire a lawyer. Don’t let the cost or any amount of trust or coercion keep you from hiring a professional to review legal documents.  Just do it.

Hire a Business Coach

Now that you’ve gathered the information, understand the culture and processes of the company, done external research from past employees, reviewed the financials, and your lawyer says the contracts are good, should you still hire a business coach? Hell yes! You need someone who can help you evaluate if this decision is the best for your life and makes sense for your business and financial goals. They’ll be able to dig in, touch base on your mindset and FOOBS, run the numbers for your situation, and challenge you to be as intentional as possible. They’ll also be there to support you if something doesn’t work out, they’ll tell you it’s ok, and they’ll help you get back up again. They will advocate for you, so it’s a win-win!

Define Your Role From the Beginning

Sometimes when you’re entering into an existing business, it’s unclear what you’re supposed to be doing or how the group will function with a new person. Things get fuzzy and confusing, dynamics are sensitive, and it can be difficult to know when to speak up versus when to allow them to be the experts of their own business. When do you take initiative on a project, and how well do the processes work that are in place? There’s no easy answer to many of these questions, and navigating it can be murky. So be clear from the beginning as to when you will work, how to contact you, clarify your roles, and explore what you see working and not working, as well as a clear path to make improvements. Understand what you are responsible for, and take care of that before trying to change the whole system. And if you come in feeling like you need to change the whole system, you probably shouldn’t go in at all.

Express Your Concerns

Discuss your observations with the other partners, and don’t be afraid to advocate for yourself during any part of the process of running the business. Just because you’re the new person doesn’t mean your thoughts aren’t valuable in helping the business be more efficient or profitable (or ethical). Show up for yourself, your employees, everyone’s clients, and the field as a whole as you’re moving the business forward. Don’t let other people dismiss your concerns or tell you things “aren’t a big deal.” If it’s a big deal to you and you see the consequences of the same process being implemented over and over again, it needs to be addressed and taken seriously.

Set Clear Boundaries

Boundaries can be simple if we let them be. Brené Brown defines boundaries as “what’s ok and not ok.” In reality, we make setting boundaries more complicated than it needs to be. Again, our mindset and head trash sneaks in, or FOOBS is popping up all over the place. It’s ok to say no to something, it’s ok to set parameters on what times phone calls will occur, it’s ok to only communicate by email and not text, and it’s ok to disagree with someone. Your life can determine what you do in your business, not the other way around. This is true no matter how many owners are involved.

Behave Professionally and Expect Professionalism

I had the false expectation that when I went into business with a group of therapists, we’d be able to communicate well. Of course, therapists are still people, and none of us are going to do everything perfectly. Communication is often a problem with businesses or work settings, regardless if it’s a group of therapists or not. People are people. When things get contentious, anxiety is high, or emotional and mental abuse occurs, professionalism goes down the toilet.  I’ve seen it firsthand—a group of professional therapists yelling at each other, lashing out, and name-calling. One thing that helped me during this process was to always remain professional, explain things as clearly as I could, and understand my own boundaries (which is a moving process, of course). When someone began making demands on my time, money, or mental health that were on my list of “not ok,” it got easier and easier to disengage from the situations and state clearly that a boundary had been violated. No matter how angry or hurt I felt, I continued to expect professional behavior from everyone involved, which allowed me to back away instead of getting sucked into further dysfunction.

Trust Your Gut

Where there’s smoke, there’s usually fire. We help our clients to understand and listen to their emotions and instincts and give them a process for sorting out what’s real, what’s perceived, and how to use the data our emotions give us to make intentional decisions for our lives. Our gut feelings are powerful. That doesn’t mean don’t get in business with partners or don’t take a risk on something, but it does tell you to slow down, get in touch with what’s coming up for you, listen, and think. You don’t have to make any quick decisions when it comes to investing or joining a business. You don’t have to do things because “that’s how it’s always been done.” You don’t have to stay quiet about something that’s bothering you or allow someone else to dictate what’s right and wrong. If something feels off, don’t ignore it. Get help from other qualified professionals like lawyers, accountants, and business coaches, make informed intentional decisions, and above all, trust yourself.

I made every mistake on this list. Every single one. But you don’t have to. I’ve learned a lot about myself in this process, and I won’t make these mistakes again. I’ve recognized family patterns that contributed, I’ve gained knowledge, I’ve reached out for support, and I’m working on letting go of my shame every single day. My hope for anyone out there is that they take my story and integrate these lessons into their decisions. Don’t let fear, or pressure, or old messages make you feel like you’re not enough, because you are.”

Wow! I love how vulnerable this blog was. Unfortunately, this stuff happens often. And businesses that use this kind of partnership strategy will often continue to pull in other unsuspecting investors over and over again. Always do your due diligence and make sure it is VERY clear how you can cancel your contract, sell your shares, etc. if things are not what they were shared to be.

Let’s hear from you: What are your questions about investing in a group practice? Post them in the comments section so we can create an “FAQs about investing in a group practice” blog for you!