A letter from a skeptic

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Letter from a skeptic

Recently I received an email from one of the readers of Practice of the Practice. She had some pointed questions about my monthly income reports. Each month, I post exactly how and where I make money. For me this is for a number of reasons:

  1. We are often told “we didn’t go in it for the money” and I don’t think that has to be true.
  2. Money in and of itself is not bad, it only expands what is already there.
  3. When we think differently about money, we can go after the health, relationship, and lifestyle goals we have
  4. By being transparent and open to criticism, I build trust with those that read my blog and listen to the counseling podcast.

I asked this person if I could publish her email and our correspondence without her name, she agreed. I really appreciate how she approached this from such a kind and thoughtful manner.

Letter from a Skeptic

Here’s what she said:

“Hi Joe,

Let me say right away–I’m a happy listener/reader/subscriber of yours.  I have benefited from your work and appreciate all you do to be open and helpful to therapists in practice.  So this question for you comes from a place of respect and curiosity.
I have been wondering for the last several months why your income is so low on the counseling end, given the large number of therapists in your practice (I ask this with the understanding that you personally limit your number of sessions per week for other pursuits).  I also recognize that many people would not necessarily judge this number to be low, but what you’re grossing as a group of 7 needs to be what one therapist would need to be grossing on their own to make a low six figure salary.
You owe me no answer, of course–but an answer would help me to put your advice for practice building and marketing into context for my own practice.  Is it possible to market to sustain even reasonable part-time caseloads (let alone full-time caseloads) for a group as large as yours?
Hoping to learn from you about this, so I can quiet my inner skeptic 😉

My Response About Group Private Practice

Hey L.,

Totally valid question. For me it has come down to where I find the most energy/excitement and where the market is. As I grew my part-time practice on the side of my full-time job, I had four others working there. Because I knew I couldn’t devote a lot of time to them, I sought out people that were looking for smaller case loads. As a result, I currently have a bunch of people that want to stay around 10 sessions per week and two people that are fairly full time. My top grossing therapist brought in around $6,000 last month.
I could definitely find more people like my top grossing therapist. But, when I think about my ideal day, it’s way more fun to make podcasts, write blogs about marketing, and connect with other therapists to help them.
For me, my lifestyle business isn’t just about working the right hours, but working doing the right thing that leaves me feeling energized. For now that is way more on the consulting side.
Does that make sense? I love how respectful you were in your question. Also, if I don’t use your name, could I have this be a public blog post with your question and response?

Her Response

Hi Joe,

So good to hear back from you–thanks for engaging in this with me.
And yes, you may absolutely use this to generate some discussion in a blog post.
I’m still struggling with this though–I guess I wonder whether the business has the potential to grow on the counseling side of things should you want it to (do any of your therapists want more?) or if it’s maxed out where you are (and perhaps that’s nudged you in the direction of consulting, in combination with your personal desire to do that) so it happens to be a good fit for therapists who want a smaller caseload.  If that’s the case, what do you think you’d have to do–beyond what you are doing now–to grow it?  And COULD you, with these efforts, support a full time group private practice?
This is fun 😉

To Which I Said

Hey L.,

I’ll write up a blog post about these questions because I think they are really important. I’m looking at bringing in another therapist that wants to be more “full time” so my monthly income should reflect that in coming months, thanks!


Addressing the Central Questions

So L.’s leading questions were:

  1. I wonder whether the business has the potential to grow on the counseling side of things should you want it to (do any of your therapists want more?)
  2. Is it maxed out in our area?
  3. If so, what would I do to grow the practice? Could this support a full time private practice?

How to Figure Out a Private Practice’s Growth Potential

There are a few factors that play into the growth potential of a private pay group counseling practice:

  1. The socio-economic status of the area, which leads into the ability to pay.
  2. The dependence on insurance in the area that does not have out-of-network providers.
  3. The overall marketing that counselors in private practice are doing.

When I specifically look at Traverse City, there are a few statistics that I analyze. When I look at the U.S. Census Quickfacts for the area:

  • Grand Traverse Co. is Growing: The population estimate for 2015 is 91,636, up from 2010 which was 86,986.
  • People Own Homes: The housing rate for single family homes is 75.7% which is a large percent of people that are invested in the area.
  • Traverse City is Educated: Of people over the age of 25, 30.8% have a Bachelor’s degree or higher. This is slightly below the national average of 33%, but pretty darn close.
  • There is an average household income: The median household income is $52,487.

In summary, the area has a need for counseling and an ability to pay. In addition, qualitative data shows a growing upper class and retirement community. My assessment is that the area has an ability to pay. Further, a quick Google search will show that most Traverse City counseling practices are not following best practices in marketing and client acquisition.

Is There Room for My Counseling Practice?

A common question I get is whether a counseling private practice can make it in a competitive market. In my book, Practice of the Practice | A Start-Up Guide to Launching a Counseling Private Practice I use the analogy of sushi.

Yes, sushi.

Think about ten years ago. Sushi was available in only a few fine restaurants, usually in bigger cities. As people tasted sushi and were educated, they started ordering it more.

If the first sushi restaurants said, “There’s only market enough in this town for one sushi restaurant” they would have missed the entire sushi growth trend. Now, we have sushi in most small town grocery stores.

In counseling it’s the same way. Such a small amount of people get counseling. Most people could use help. I believe there will always be a growing market for counselors. Further, the occupational job outlook for counselors is strong. Growth for the industry is expected to go up by 19% which is “much faster than average.”

So yes, I would say there’s room for any practice in almost any town!

How to Grow a Private Practice

Say I wanted to grow my income through my counseling private practice. How would I do it? There are three phases I would focus on:

  1. Gaps in service
  2. Gaps in marketing
  3. Gaps in conversion

Service Problems in a Counseling Private Practice

Currently I know where we have gaps in service, here are some of the current areas we can improve:

  • Offering same day intakes so people don’t have to wait.
  • Answering phone calls or calling back within 15 minutes.
  • Specific niches that we don’t cover.

So as I look for our next clinician, I’m going to look for a “Yes Person.” Someone that is so excited about private practice that they will say “yes” to almost any client at any time. Our recent analytics show us that we have lost several clients due to not having the right hours or specialty area. As a result, we’re not filling up as quickly as we could.

Gaps in Marketing

If I was looking to expand my counseling practice, I would look at local gaps in marketing. For example:

  • What needs could be met by a Facebook group?
  • Who is offering speaking engagements?
  • Does the local paper need more writers?
  • What local radio does my ideal client listen to?

If I could identify where other therapists are not operating, we could expand there.

Gaps in Conversion

Tracking conversions is really important. For example, if I have 500 people come to my website but only 3 make an appointment, I have to start looking at why this is happening. Maybe I need to:

  • Change the location of the call to action
  • Create profiles that are clearer for my clinicians
  • Keep track of why people do schedule an intake vs. those that don’t

Understanding the client conversion would be the last piece of the pie.

Why Grow a Group Practice?

Let’s look at the impact and finances of a group practice. If you can only see 20 people per week, that’s only 20 people. If you have 5 clinicians that each see 20 people, that’s 100 sessions/people that are positively effected by your business.

Also, imagine those 100 sessions are each paying $100. After costs if you were taking 25% that would be $2,000/month. Of course you can structure it to increase your bottom line.

L. I hope that answered your question!

Meet Joe

private practice consultant joe sanokJoe Sanok is a speaker, mental health counselor, business consultant, and podcaster. Joe has the #1 podcast for counselors, The Practice of the Practice Podcast. As well, his daily podcast, The How to Become a Consultant Podcast reveals the secrets of becoming a consultant through interviewing the world’s top consultants.

With interviews with Pat Flynn, John Lee Dumas, Chris Ducker, Rob Bell, Glennon Doyle Melton, and JV Crum III, Joe is a rising star in the podcasting world

Joe is  a writer for PsychCentral, has been featured on the Huffington Post, Bustle, and Yahoo News. He is a keynote speaker, author of five books, and is a top-consultant. Joe has numerous interview topics he can discuss. Joe’s humor, natural pacing, and energy make him an ideal podcast guest!