2023 Recession Plan for Therapists

Updated October 4, 2022:

On June 8, 2020, the National Bureau of Economic Research released a statement that the United States was officially in a recession. Oddly enough, we started hearing murmurs of recession in the early spring of 2019… well, before a global pandemic rocked our economy.

Miranda actually planned to write a future blog about the recession in 2019, but we never could have expected the way things would change for all of us in just a few weeks’ time.

Here at zynnyme, we don’t talk about things to talk about them. We dig into what our options are, provide resources, and help you develop a plan that works for you and your unique business and vision.

Miranda started her cash-pay private practice during the 2008 recession in one of the worst-hit cities in the United States. And guess what? It flourished. Kelly built her practice during the recession in a city saturated with therapists.

We know every recession is different, but we think there are lessons we can bring forward from our pasts that help us to navigate our futures.

Defining a Recession

A recession, by definition, is “a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.” Effects of a recession often include high unemployment rates, defaults on loans and mortgages, and a flurry of public policy decisions related to managing the change in cash-flow AND attempts to stimulate the economy.

Worst Jobs During a Recession

According to Yahoo Finance and their analysis of employment data from the downturns in 1990-91, 2008-2009, and 2013, the following were the worst jobs to hold during the recession: tradesmen (plumbers, construction, etc.), manufacturing workers, CEOs, drivers, farmers, and finance workers. While many therapists “feel” like mental health and helping professions are the first to go and the least needed, this actually doesn’t align with the data.

A Recession-Proof Businesses

In fact, every list of recession-proof industries we could find (like this one) included healthcare. Some lumped mental health in with physical health; other lists listed psychologists, social workers, and others as the jobs least impacted by previous downturns and recessions.

Statistics Are Great, But What Happens in Real Life?

Here’s a bit of my story: I quit my county job with amazing benefits in the spring of the height of the 2008 recession after receiving a clear message from God that it was what I was supposed to do. I was already teaching and had jobs at a local junior college and at a local university. In October, I started a cash-pay private practice. People thought I had lost my mind.

I hadn’t been licensed long enough to get on insurance panels. I knew VERY little about how to run a business. And I had a child that I was nursing at home. I built my business, designed my website, and learned online marketing during my child’s two naps during the day. He didn’t sleep well at night (and if he skipped a nap during the day, the nighttime restlessness got even worse).

But, I knew what I was supposed to be doing, so I kept my blinders on and just took one small step at at time, day-by-day and week-by-week. I had a great clinical reputation at the local psychiatric hospital and with agencies, but people I respected said they’d only start referring to me once I was on insurance panels… you know, the ones I couldn’t get on because I hadn’t been licensed long enough.

I figured once I was eligible for insurance panels I’d consider them if my practice wasn’t full or growing. And then, guess what? It grew! People hired me, they came to see me. Couples on unemployment budgeted for couples counseling while living with their parents because their relationship was EXTRA important during the recession.

That cushy county position with the great benefits that I left? They started doing furloughs and reducing benefits, and my old coworkers had to manage with decreased income while I was able to adjust my income. In fact, my spouse’s industry was eventually impacted by the Great Recession, he was laid off, and I was able to adjust my business plan and hours to ensure that we could pay our mortgage while he went back to school.

Good Businesses to Start in a Bad Economy

Apparently, my story is not isolated. Entrepreneur Media lists healthcare as a good business to start in a bad economy.

How to Survive (and Thrive) During a Recession

Business Horizons is a peer-reviewed scientific journal that provided recommendations on strategies to prevent economic recessions from causing business failures. Their recommendations include:

• Positioning the company in multiple markets and geographies

• Planning to confront declining sales

• Maintaining advertising

• Attracting new customers

• Finding alternatives to price cuts

• Preparing for economic recovery

But does this really apply to the healthcare and helping professions? Here are things we’ve heard consistently over the years when rececessions, inflation or anything else starts to make us question the future. “Therapists can’t sustain a practice based on cash-pay while unemployment rates are up.” “We can’t afford to spend time marketing and working on our businesses.” “We need to increase our caseloads and decrease our fees, right? Isn’t that the right, ethical thing to do?” “You better get on insurance now- that is the only way to sustain in a down economy.”

Step #1: Your Business Needs to Stay Open to Help People

Expenses do not magically decrease because the economy is struggling. Your fee should be based on a sound business plan, expenses, and your needs for taking care of your family. In fact, during the Great Recession, my needs for my income went UP as we came close to being a single-wage family. I still had childcare costs as my husband was laid and went back to school, since he couldn’t find a position; my office lease didn’t magically reduce; my landlord’s mortgage didn’t magically get refinanced.

But people needed me more than ever. I needed to show up for work not worried about whether my house was going to get foreclosed on. I needed to know that I’d be able to buy groceries. No, I did not contribute to retirement during that time—I figured I’d have time to catch up later.

There were adjustments I could make based on my life and situation. But, at the end of the day, I needed an income to maintain doing the work. So, I made adjustments to my business plan. I didn’t hide. I didn’t assume no one needed therapy. I kept showing up in the world—even though my town of Modesto was one of the worst-hit cities by the Great Recession, with unemployment rates at 17.5%!

What You Need Right Now:

You need vision, motivation, a plan, and support to keep moving forward. YES, you can maintain a private practice during a recession. YES, you can START a private practice successfully during a recession. And YES, you can conquer the burnout you’re probably feeling from everything going on in the world and ensure you can proactively address it in the future.

To help inspire and support you, we’re offering a 4-Day Masterclass to help you develop a plan that works for you and your business.

During the FREE Marketing Masterclass, you’ll learn:

• Everything you need to start effectively marketing your practice
  (how to start, what to say, what to do, and your business system)

• How to maintain a thriving practice regardless of changes in the world

• What you can do NOW to start creating a happier life and business

Interested in watching the replays of the Marketing Masterclass (eligible for 3 CEs with the APA and NBCC)? Click here to access our FREE Marketing Masterclass for Therapists!