Starting a business is, unsurprisingly, a lot of work. It can be intimidating and incredibly stressful, especially for those of us who didn't go to business school. As a therapist, having my own group therapy practice and starting a coworking space has been the most stressful, rewarding, confusing, and exciting thing I've ever done. I remember the first year of both businesses was spent staying up until all hours of the night looking up answers to every question about all the little details about money and setting up a website and so many other things you don't even think about until you are in the middle of it. You will inevitably make a million mistakes on your private practice journey, and that's okay! I will never forget when my first client came in for her first session and I had no way for her parent to sign the paperwork. I just hadn't thought it through. I spent plenty of time making sure I had the right paperwork, but had no way for a parent to sign it. It worked out in the end, the paperwork got signed and I pretended like I knew what I was doing the whole time, but that first year was filled with incidents like that. And if I'm honest, situations arise all the time that make me rethink my business policies. Which brings me to number one on my list of the top 3 common mistakes new practice owners make.
1. Not thinking through your policies and updating them regularly.
It’s 1:55pm and your 2pm texts to say they can’t make it. You have parents who want to sit in on the next session. Your client calls almost every week in between sessions to ask “a quick question” that turns into a 30 minute talk. Your client wants to bring kittens to the next session (true story and that one was an obvious "yes" for me). I could go on and on about all of the ways that clients have stretched boundaries or made me rethink my policies. But, it is IMPOSSIBLE to think up every scenario that will come up in your practice however, I suggest at least thinking through:
- Your cancelation policy and what you’ll do for sick clients and emergencies.
- How you will handle in between session contact.
- How you want to handle and bill for contact with collaterals (e.g., parents, doctors, schools, etc.).
2. Not having finances set up properly
I hear about it from my coaching clients and in the therapist Facebook groups all the time-managing the money side of the business is confusing, scary, and not much fun. Getting a business bank account, figuring out quarterly taxes, and paying yourself is incredibly overwhelming. It’s enough to make any new practice owner want to go back to their agency job or work for someone else. Maybe you’ve been hit with fees from the IRS because you weren’t paying quarterly taxes and have hours and hours of bookkeeping to do because you don’t have a business bank account set up. Maybe you have no idea how to pay yourself and feel like you are constantly treading water because you have no idea how to account for the variable paycheck that comes with being a business owner.
I get it, understanding the money side of your practice can be daunting. When I started, I remember the near constant panic every time a client canceled because I didn’t know how to account for the ebb and flow of my business. That panic made it so hard for me to actually sit down and look at my finances. I just wanted to stick my head in the sand. But, I knew that was not a longterm solution. As we tell clients all the time, we can’t fix something we ignore. Generating revenue is the main purpose of your business (otherwise you’d just be doing it for free), which means having a handle on your finances is the most important thing you can do for your practice.
The most critical things for the financial health of your practice are to:
- Have a business bank account—your business finances absolutely have to be separate from your personal ones.
- Pay your quarterly taxes—Quickbooks or an accountant can help you figure out how much you owe.
- Pay yourself consistently—get in the habit of paying yourself on a set schedule. I highly recommend reading the book Profit First by Mike Michalowicz for help on figuring out how to pay yourself.
I also have a handy Private Practice Finance Checklist you can download here for more recommendations.
3. Not making your business fit your lifestyle.
You have this amazing new practice, you're your own boss, and you are bringing in money. But you realize you’re more tired than when you worked at an agency and dream about going to work a 9-5 job where you hope no one will talk to you. You did not leave your last job to feel like this, but here you are. One of the biggest mistakes I see therapists make, new and seasoned, is not creating a practice that fits a lifestyle you value. You feel like you have to make money right away so you are taking on any and every client who reaches out, even if they don't fit your expertise. You are working long hours and you never take a day off because you are afraid if you don't take that one additional client, all of your clients will disappear. And you also aren't charging your worth because you think no one will ever pay your full fee. That is not a sustainable mindset and you will set yourself up for burnout very quickly. Your business is there to serve you and your lifestyle, not the other way around.
It's really important to:
- Get clear on your values—what do you want your life to look like?
- Charge a fee that will support the hours you want to work and the caseload you want to have.
- Meet with clients that are a good fit—you aren't doing anyone any favors if you don't like working with your clients.
My Ultimate Private Practice Boundaries workbook and video will get you set up for success on your private practice journey.