When someone asks you, “How is your practice going?” you start counting how many clients you have. Perhaps you’d consider whether you were enjoying the work, or how challenging it can be.
But what if someone asked you, “How financially healthy is your practice?” Most of us would not know how to answer that question. You might feel like you know financial health when you see it, but you’re still scratching your head when it comes to the steps of creating a financially healthy practice. In short, how do you have more money left over at the end of the month? Here are a few guiding principles.
1. Work on your “inner game.” Your mindset can have a huge impact on the financial health of your practice. Do you have a can-do attitude? A support network you can turn to when your fears creep in? Being aware of your own limiting beliefs and making a concrete plan to reduce them is essential. Chances are you help your clients create a mindset of success, so why not do the same when it comes to your practice?
2. Know your target. Who are you trying to attract as clients? What do they tend to identify as their problem? Rather than focusing on diagnoses or clinical specialties, keep the language general to the public. For example, maybe you want to work with parents of gifted kids, or women who want their mate to be more attentive. Couples who are tired of arguing may not be a diagnosis in the DSM, but they a much more accurate and effective target for gaining clients.
Once you can clearly identify what your ideal client wants, you can create a plan for growth for your practice. This includes speaking, networking, and online marketing plans. Being able to consistently implement these strategies will increase your income by bringing in new clients.
3. Develop a Money Management Strategy
It’s normal not to have a complex understanding of your finances when you start a practice, leaving the numbers to the accounts. Your focus is on paying your bills and doing good clinical work, but retirement and the thought of actually paying yourself a great wage are definitely floating around in your mind.
Profit is important for more than simply paying the bills. It’s what banks will assess if you need credit, and it creates the possibility of being able to sell your business one day if you choose.
So for every dollar that comes in, consider the old “envelope” way of budgeting that your mom used. Allocate some for immediate profit, some for business operating expenses, some for taxes, and some for the “down seasons” in your practice. If you’re unsure what percentages to use, ask your accountant what numbers are best to see you through thick and thin.
So there you have it! With the right inner game, a targeted marketing plan, and a money management strategy, you will be well on your way to growing not only an enjoyable therapy business, but a financially healthy one as well.