Thoughts on starting a practice

Dophin I get a lot of questions from therapists starting their practice on the best way to go about it.  The thing is, there are many ways to do it successfully and many ways to screw it up.  I made my share of mistakes but fortunately, they haven’t cost me a great deal and they had more to do with the business side than the clinical side.  I decided to list important things I learned or wish I learned before getting into it.

Work for an agency after you get your license but before you begin your practice

I’m not a big believer in rigid licensing. While some level of protection should be afforded to the public, I think the current system is more about managing competition and justifying bureaucracies.  That being said, the number of hours that are required to obtain an LPC or LCSW (in NJ at least) are really not enough in my opinion – that’s right – even if you include your internships you’re probably still not ready.  I waited too long before I started my practice but I’m glad I didn’t start it the minute I got that piece of paper in the mail.  Working for an agency or hospital as an LPC or LCSW (even if you were working for one before you got your license) will allow you to practice working at a more independent level in a highly accountable environment.

Protocols, policies and best practice become part of your thinking as those organizations are accountable to funding sources in a way private practices are not.  So, while you’re feeling out your new found independence you have a bunch of folks watching what you do and informing your decision making – think of it as the adolescence of your career.

Working for an agency also provides you with exposure to some very complicated work and a variety of opinions from different disciplines in thinking about the work. You will probably not have consistent access to that kind of opportunity running a private practice .  This exposure lessens the risk of being blindsided in your practice as you’ll be more adept at picking up red flags and more informed on to how to handle them. I recommend working for an agency or hospital at least two years after you’ve received your license.

So while this part isn’t so much about starting your practice; it is about preparing yourself to be ready for the responsibility attached to it.  In my experience there are distinct differences between folks who cut there teeth working within agencies or hospitals and those who began their careers in private practice and never ventured elsewhere.

Private practice shouldn’t be your only thang.

That’s right, I meant to write “thang”.

I’ve been pretty fortunate in my practice but I’m always aware of the risks involved with running my own shop. I started working in a group practice until my caseload built up while holding a full time job.  When I was ready I rented an office and the madness of building my practice further while still holding down a full time job ensued – this helped me avoid dipping into stored money or accumulating debt. But it represented a real cost when it came to family time – if you plan on going this route make sure your marriage and family life are in good order and that your spouse is behind the idea.

As my practice grew and became more consistent I began shaving my hours down at my salaried job.  The place I work for is very entrepreneurial and business minded, so I lucked out in that respect. I still work for those guys because I really like the place and it affords me stability when it comes to income. The other benefit is that you get out of your silo and you maintain exposure to what other folks are doing, you’re pushed to keep on top of new theories, research and trends.  I work with a lot of smart people at my part time gig and I learn a lot from them; I wouldn’t be as effective in my private practice without keeping my foot in an agency setting.

Be aware of the “suck”

Being in private practice means that I can be with my kids…a lot. I don’t have to use or pay for day care which saves me about 2-3k/month and gives me peace of mind. I also have a different kind of relationship with my clients in that I work with them longer and my success is directly tied to their success. These two factors make up the value I get from going solo.

While a great deal is said about “not having a boss” – that’s a myth; you have many bosses.  We refer to them as clients – and private practice means that there is a whole new dynamic to the relationship than you’re probably used to.  In an agency, losing clients typically means looking at what happened and trying to do better. In private practice it also means having to figure out a way to fill slots so that your income does not get affected. This isn’t a big deal when you’re up and running but when you’re starting every client counts and you can’t afford too many hits on reputation. In an agency, program issues may not always mean a loss of funding as funding sources try to give agencies a way of working things out – you have no such guarantee in private practice.

Also, there is no paid time off which means vacations and sick days will always cost you more than it does other folks who pull off a regular 9-5 gig. Taxes are also an issue, and while you have the ability to write things off, in my experience, it still hurts a bit more than a regular salaried gig. At the end of my first full year on my own, I got sticker shock when I found out what I owed – and this was after meeting with my accountant twice that year in trying to plan for it.  Fortunately, I was able to pay it off and came up with a more realistic budget, but it’s still a moving target. This brings me to my next tip.

Taxes Get a good accountant

Seriously.  You need to be honest on your returns; not doing so will only hurt you. Many therapists starting off in private practice don’t do a good job of understanding deductions – they deduct the wrong things and don’t count legitimate deductions. I thought I was pretty good at it since I had another business prior to this one and I still made mistakes that my accountant needed to correct. Keep track of everything, let your accountant sort it out and make sure your accountant is someone you talk to frequently during the first few years of your start up.

Be clear on money

I never understood the discomfort therapists had in holding folks accountable to what they owe.  For starters, allowing clients to run up large bills is un-ethical because it places you in the position of creditor which is a dual relationship. If your client owes you thousands of dollars that’s more your problem than it is theirs.  I practice what I preach when it comes to money – I deal with problems directly when they are small which ends up being better for not only me but also my client.  Money represents a clinical boundary in a treatment relationship and if you cannot assert yourself on what is both legally and morally yours; what are you modeling for your client? Would you rather tolerate the discomfort of setting the boundary on the small amount now and risk losing a client or being in a position where you are out thousands of dollars and potentially liable for creating the problem? Get over it. Fast.

Now for the business end – if you’re in a cash only practice and you’re not on top of collecting fees your practice is in for a world of hurt. In-network clinicians are now experiencing the same issue as insurance companies are increasing co-pays – a good number of my clients foot the majority of their bill for sessions. Most clients are honest and will pay their fees; I’ve had very few problems in that regard but I’ve also heard horror stories from colleagues about open balances that a starting practice would have a tough time covering. Sure you care about your clients, but what good are your skills to them if you have to close up shop?

There is no in-network boogey man

I know that therapists (generally speaking) strongly dislike (read hate) having to deal with insurance companies but even those I feel are the worst of the bunch are really not that bad. If I were to break down the amount of time I spend on the phone with an insurance company it probably comes to 3 hours a month on really bad months.  Most insurance companies require you to do what you should be doing anyway and they provide a consistent stream of referrals.  As for the privacy concerns, I get that therapists often cite this as a reason why you shouldn’t use insurance but you do know that insurance companies already have access to a whole bunch of private information on your client already, right?  And again, the likelihood that an insurance auditor will review the nitty-gritty of each of your client’s files is low.  The down side is that you make less per hour but cash clients eventually have a problem with pulling out c-notes each session and most folks in saturated markets will have a tough time starting a cash only practice that will sustain them full time.

That being said, don’t go in network all the way; pick a few that will hold up flow while leaving room for out of network clients to find their way to you. Following this strategy allowed me to find a decent balance between volume and revenue.

Invest in an electronic record and use it

The 50 bucks a month is worth the peace of mind.  Many EHR’s hold your billing and clinical data  and the forms prompt you to complete fields that most insurers want to see in the unlikely event of an audit. Give yourself about 15 minutes in between sessions to complete notes. Notes aren’t just about passing an audit or protecting yourself in a lawsuit, they provide a coherent narrative of your work with a client and can be valuable when you’re feeling stuck.

Don’t fall for the non-profit line (social workers this is for you)

Social Workers have this idea that non-profits are inherently nobler than for profit settings and as a result they commit to spending their careers in these organizations. I’ve been a manager for a bunch of non-profits -I wrote a whole bunch of proposals and budgets in my time – they care about money and keeping their pockets full as much as the next guy. And yes, a few do it at the expense of the folks they are supposed to serve.  What does this have to do with private practice? Most private practices are for-profit operations and I can tell you that many of the folks I graduated with, and some of the academics who taught them, just didn’t like the idea of social workers going into private practice – they would describe it as “selfish” or “not what social work is about”. In my experience, at least, for-profits actually tend to be more client-focused than non-profits because they are accountable to the client; not a funding source that looks at most things in the aggregate. You’re not accountable once or twice a year when the funding auditors visit – you’re accountable every session to every client.

Your role as clinician is more important than your role as business owner

The cool thing is that by following this “whatever you want to call it”, your practice will probably be more successful.  Therapists can get a little weird when it comes to boundaries and they overdo it.  I know this feels a bit contradictory after talking about the money thing but there, I was talking more about not letting a problem get out of hand.  One example that I feel drives the point I’m trying to make home are phone calls.  Look, I know time is money but charging someone for phone time creates a barrier to them calling you during a time of need, which can create bigger problems in the long run. In my thinking it isn’t that big of a deal- part of owning a business means being open to personal time taking a hit once in a while.  If it gets out of hand and the issues are not indicative of risk, I might ask a client to go through their coping skills and informal supports first. It’s not about the money, excessive calls to a therapist are an issue of sustainability.  If the calls are necessary, consider increasing the number of weekly sessions as a condition of treatment or refer out to a higher level of care.

Have a coherent marketing strategy and keep up with it

Marketing is more than just business cards and a website – it means being involved and active through whatever medium you choose to emphasize.  You should plan to spend between 5-10% of what you take in on marketing – even if you’re at full capacity. If you’re good enough at what you do, potential clients won’t mind being put on a waiting list for a week or two – some may even be willing to see you on a cancellation basis (there are clinical considerations with this that I’m not going to cover right now)..

Of all the marketing strategies I’ve spent time or money on the most effective have been weekly calls to referring psychiatrists keeping them up to date on their client’s progress, an active blog, Facebook page, Twitter account and a car magnet.  Go ahead and laugh.  They may look silly but my car magnet has increased calls to my office by about 15%.

What works for me may not work for you, don’t be afraid to experiment during the first couple of years. I tried everything – breakfast presentations, mailings, giveaways, etc. – before I settled on what I do. Eventually I whittled what I did down to a few things that seemed to have good results and gave up on the rest…..for now.

Treat other therapists well

Therapists are a weird bunch, we don’t necessarily view each other as competition. Well…. I have a bit of a competition “problem” – but most therapists aren’t like that. If you hit your stride, be sure to help others out.  Not every client that walks through the door is going to be a good fit, having someone you know and trust as an option helps you and your client.  If a colleague does good work, promote their events, workshops or success on your website or social media fronts .  Get excited about others doing well so that they make the same investment in you. There is a concrete benefit to this – the profession doesn’t turn into a shark tank and clients have more options in getting the help that they need.

4 thoughts on “Thoughts on starting a practice

  1. Thank you for sharing your insight. I, myself, have had a private practice for three years and held a part-time job as a source of steady income. I’m now moving into a full-time practice and find your suggestions helpful. Best of luck in your practice.

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