Money Matters in Private Practice
For those of us that have made the choice to go into private practice, we do it for many different reasons. Primarily, it's because we want the autonomy and freedom that being a private practice owner can bring. We want to be able to be our own boss and set our own schedules. We also want to be able to have the kinds of clients we work with best and the freedom to do the kinds of clinical work we enjoy the most. Also, as private practice owners want to have more direct control over their earning potential and growth as a practice.
Being in private practice can provide all of that and more. But in order to do that, a clinician needs to know how to manage three different things.
First, they need to be a competent clinician and be able to do meaningful work with their clients/patients. Clients need to feel that coming to work with the clinician is making a difference in their lives and that change is occurring.
Secondly, the private practice clinician needs to be able to handle their clinical documentation efficiently and hold themselves accountable for accurate documents. The documentation needs to track client/patient progress and show the work that the clinician is doing, along with schedules and scheduling. There need to be systems in place to maintain those records and keep them safe.
Thirdly, since being in private practice is a business (whether you like that idea or not), it has to be run in such a way to make it profitable and sustainable. Having a business plans, financial plans, marketing plans, bookkeeping and accounting systems in place are necessary parts of being running a private practice. And in many ways, just as important as the first two.
The problem for most of us that have chosen to go into these helping professions (marriage & family therapists, professional counselors, social workers, psychologists or any other number of helping professions), is that we have received great clinical training but very little business and finance training.
Unless you were a business major as an undergraduate or taken some business courses, you probably never received any sort of formal business training. If you were lucky though, you might have gotten some business experience working outside the clinical world.
In this book, I wanted to share what I have learned about finance and business after nearly 12 years in private practice. Like most other clinicians in private practice, I never received any business/finance training. In particular, training about how to manage the financial side of running a small business.
Much of what I have learned, I learned the hard way… I’ve made some mistakes. I am not a finance expert, but the truth of the matter is finance is really not that complicated. It’s simply a matter of knowing how to do some fairly simple math and knowing how to allocate money in the right way. Knowing a bit about accounting and bookkeeping is important. It also means knowing a little bit about taxes and investing.
But don’t let any of this intimidate you... If I can learn this stuff, so can you!
Even though I have not had any formal finance and business training, I have had the privilege of working in both for profit businesses and the non-profit sectors. These previous careers taught me a lot about finance, budgeting and the importance of making a profit. I also learned the importance of consulting with experts and learning as much as I can about this topic. It has made a huge difference in my own practice and others.
Ultimately, your private practice should support the lifestyle you choose to live. It’s probably why you chose to go into private practice to begin with. You also have gone into this career out of a deep sense of wanting help others and making a difference in the world. In order to do this and and sustain your practice, you have to pay yourself well and make a profit.
My hope is that this course will help you learn some concepts and know how to apply them to your own private practice. This book, of course, isn’t everything you will need to know about private practice finance. But I do think it will give you the tools and knowledge you will need to make your private practice profitable and sustainable.
Enjoy the journey!