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Do you feel daunted by the prospect of creating your business? Do you want to hear Joe’s top 9 tips and lessons to prepare you for your first year of private practice? Can you see the dream you want but don’t yet know how to reach it?
In this podcast episode, Joe Sanok speaks about your first year of private practice.
Podcast Sponsor: Noble
Our friends at Noble have run their own clinics, worked with thousands of clients, and have seen firsthand the burnout and stress that can come with heavy caseloads, difficult topics, and a lack of time.
With these issues in mind, Noble built their app to support therapists by making between-session support easy and offering an opportunity to earn a passive income. Now, with new CPT codes coming in 2023 that will allow therapists to offer reimbursable remote monitoring support, Noble is revolutionizing remote patient monitoring.
The team at Noble has built a program that you can quickly implement to allow you to reimburse code 989X6 for Cognitive Behavioral Therapy (CBT) remote monitoring.
This is so exciting for therapists and clinics!
This new CPT code, which is coming into play in January 2023, will allow you to make more money per hour and earn passive revenue. Noble’s system provides everything needed to reimburse:
- Objective data gathering device integration
- Assessment and data stream, display, measurement, and integrations
- HIPAA-compliant integrations into other EHRs
- Real-time and immediate interventions for elevated symptoms
If you would like to discuss adding their “plug-and-play” remote patient monitoring for 2023 so you can reimburse the new CPT codes, schedule a time to talk with Eric, their CEO at pop.noble.health.
In This Podcast
- Grad school kind of screwed us over
- First off: the 3 lessons to unlearn
- Next: the 3 basics of setting up a business
- The 3 cornerstones of success in private practice
- Your quarters
- Figuring out your rate
Grad school kind of screwed us over
It is much better to be a great therapist that has no idea about business than it is to be a poor therapist that knows a lot about business, so don’t worry!
Your clinical skills are more important to have under the belt because the business stuff can be taken care of.
Grad school really doesn’t teach us the basics of business, and I hope that today can be a training that helps you to make that bridge between the clinical and what [works] in the business world.
First off: the 3 lessons to unlearn
1 – Busyness is not business: running around and constantly doing things doesn’t lead you to build a great business.
Having the proper infrastructure and systems that will help you, that’s what’s actually going to help you. If you don’t plan correctly, it’s going to be just another job, not a business.
A business pays you even if you’re not actively working. So, if you want to build a business, you need to actively build structures that work and earn money passively.
2 – Money is bad: therapists, you do not need to struggle financially! You do not need to be scolded for making money because making money and creating a profitable business is what will allow you to reach and help more people.
The truth is that money magnifies what’s already there. So, if you’re bad and you make more money, you’re going to be a bigger jerk because you have more resources, but if you’re good you’re going to continue to help the world.
3 – The best do the best: being the best is no guarantee of security. You could be the best therapist in town, but with no marketing or onboarding strategies, you would have little to no clients.
Those who work smart and venture to seek help are the ones that often head ahead and go further.
Next: the 3 basics of setting up a business
1 – Set up your business:
- Register your practice. This is state-specific so check your requirements, but it’s mostly an LLC or PLLC, or SCORP
- Set up bank accounts to keep track of expenses, income, and transactions
- Launch a basic website
It’s more just knowing how to do it and in what order to do it.
- Create a basic marketing strategy: how do your clients know that you exist?
- Do good clinical work and pursue continuing education and training to polish your skills as a therapist
2 – Find your community of growth: find a group of like-minded therapists to work alongside because it will help you to grow so much faster.
Get an accountability partner, join a cohort, and receive the additional bonus of dipping into other knowledge bases.
3 – Find solace in knowing that other people are in the same place as you, and that what you are trying to do has – in some ways – been done before.
The 3 cornerstones of success in private practice
1 – Access to organized knowledge
2 – A supportive community of people
3 – The tools of the trade and how to implement them
1 – Your first quarter
- Think about the user experience: what is your client going through before they reach out for help? How can you make it easiest for them to find you and contact you?
- Get your logistics going by launching your website, starting your marketing efforts, and networking.
- Write and publish blog posts to give new clients content of yours to read and to boost your new website’s SEO.
I recommend that you try to get at least half a year of blogs done as soon as possible. If you can get 26 blog posts up and start to link to each other, you are set – from a blogging perspective – for a while.
2 – Your second and third quarters
Assess what is working and what maybe needs to be tweaked and changed. What is the 20% in your practice that is giving you 80% of the results?
3 – Your last quarter
- Consider your workload, should you start hiring clinicians for your private practice? If you are 60 to 70% full, and you’re open to hiring, then consider expanding your business and hiring your first clinician.
- Which hats can you start to take off? What are you doing that can be done by someone else, saving you time, money, and energy to see more clients?
Figuring out your rate
Look at your lifestyle. What is the salary you want to make, the taxes of that bracket, and your projected cost of the business to roughly calculate this number?
You don’t need to stick around the rate of other clinicians in your area. You can use it as the ballpark, but not the limit.
As soon as you’re consistently 60-70% full, raise your rate substantially because you know that you’re close to being full.
You can create the business life that you dream of living!
Useful Links mentioned in this episode:
Check out these additional resources:
Meet Joe Sanok
Joe Sanok helps counselors to create thriving practices that are the envy of other counselors. He has helped counselors to grow their businesses by 50-500% and is proud of all the private practice owners that are growing their income, influence, and impact on the world. Click here to explore consulting with Joe.
Thanks For Listening!
This is the Practice of the Practice Podcast with Joe Sanok, episode number 821.
I’m Joe Sanok, your host, and welcome to the Practice of the Practice Podcast. You might hear in my voice a little lethargy, a little tiredness, a little less of the Joe Sanok you’ve come to know and love, and that is true. At the time this recording it’s about a week or so after Killin’It Camp in Mexico and what a ride it’s been. The first morning after Killin’It Camp was done, so they have these like king-sized beds, all-inclusive, but they’re two twin beds put together, so there was like an inch between, and I rolled over and got an involuntary chiropractic adjustment. In doing so, I think it was my C-seven in my neck and like popped a rib out and so I’ve had like, so much pain in my shoulders and in my, under my like scapula. So that’s going on.
Then I get home and I’m just like feeling off. My mom spends the night, the first night I have my girls, and in the middle of the night, it’s just my stomach is killing me. I won’t go into the details, but I end up in the ER for salmonella poisoning. I definitely underestimated salmonella. When I hear throw away the spinach, salmonella outbreak, I pictured it as, I don’t know, like 24 hours sickness, little puke and pooping and all that jazz, no way. I am at the time of this recording, it is eight days since I was in the hospital and my gut is still not back to normal. Met with my doctor this morning and got a good probiotic plan using some of those bioptimizers stuff they’ve sent me and went and got some, some other things and eating some blueberries, trying to get my gut floral back.
Oh my gosh, it’s a long journey. Yesterday I was probably at like 90% and today I’m like at like 80%. I had a whole bunch to do to run around town because I met with my doctor today to say, okay, all this stuff hit the fan. I’m supposed to go on this cruise with my brother, which my brother and I have never gone away, just the two of us like on a trip. In the early 2000s we were in a band that we toured and it was like this screamo band we were into all the like, screamo bands, at the time emo bands. This is the Emos, not Dead Cruise, I mean, bands like Dashboard Confessional, Under Oath, Cartel, all these bands from the early two thousands that are playing on a cruise ship. I mean, it’s like one step away from county fairgrounds. Like, I don’t want to do something that’s going to hurt me long-term or hurt my recovery, but honestly, if I can just go see Dashboard Confessional play a couple times, like that’s going, and hang out poolside with my brother, that sounds like an awesome trip.
All my doctor basically said, “Yes, we’ll get you meds to help you take care of symptoms. There’s no major things, if anything, the fact that you’re not going to have much to do for a week after running a conference and having all this health stuff, we think it’s really good for you, even if you just like sit around and stuff.” Yes, but in the midst of it, I texted Mitch my sound engineer and said, “Hey I’m taking off Sunday for a week.” He said, “Episode 821, we have nothing in there.” I remember what happened. We had a snafu with what happened with episode 800. We had to move up some things and change things around. In the midst of that 821, which you are listening to today was left blank.
So I gave Mitch some free reign to say, “Hey, work with Jess on grabbing one of the recordings from Level Up Week and pick something that you think is going to be awesome for the audience and plug that in.” We create so much content and so much of it actually just goes to the people that register for it, rather than to our whole community like you. So wanted to make sure we shared something. So I literally have no idea what they’re going to choose. That’s what’s been going on in my world. I’m feeling a little tired after this, going to do payroll, and then I’m going to go rest before my daughters get home and then pack for the Emos Not Dead tour, or not tour, cruise. Woo. There will be some stories there. Without any further ado, here you go.
Welcome to the webinar, your first year of private practice. Welcome. I’m really glad that you’re here. So let’s just start with, it’s not you, it’s them. You know grad school screwed us over. We learned a lot around the clinical side as we should, as therapists, counselors, psychologists, social workers, you may be a life coach. Whatever schooling you had, yes, that should be primary. If your ophthalmologist was really great at business, but terrible with working on your eyes, that’s not what you want. But we learned so much about working in nonprofits and running groups, all these things but the idea of running a business and running a private practice, so many professors, they may do a couple clinical hours a week just to stay relevant, but grad school really doesn’t teach us the basics of business.
I hope that today this can really be a training that helps you make that bridge between the clinical and really what’s working in the business world. So we have three lessons that we need to undo first. The first one is that busyness is not business. So being busy doesn’t actually set you up for a great business. Having the proper infrastructure and systems that will help you, that’s what’s going to help you. If you don’t plan it correctly, it’s going to be just another job. It’s not going to be a business. So a job when you don’t show up, you don’t get paid a job. If you go on vacation and don’t have vacation time or take time off, you don’t get paid. Your time is what gets you paid. That’s what a job is. A business is something that can hopefully make your business in a predictable way that you put in time to, but also you have other people supporting you. So we want to talk about how do you level up in your first year of business to position yourself to really have a business, and to not just be giving yourself another job.
The second lesson that we really need to undo is the idea that money is bad, that if you’re making money, that’s bad. The amount of times that I’ve heard therapists that are in private practice be scolded for making a decent living or a great living it’s just amazing. We can have a plumber come to our house and have an emergency plumbing situation before a family reunion or Christmas Eve dinner, and they charge 200 bucks an hour or 300 if you could even get them right now and people don’t blink at that. But if there’s a therapist that charges 200 or 300 there’s still this stigma that money is bad and we need to undo that because the truth is that money magnifies what’s already there. So if you’re bad and you make more money, you’re going to be a bigger jerk. You have more resources. But if you’re good and you make more money, you’re going to continue to help the world. You’re going to continue to do things for the world.
Then the third lesson we need to undo is that the best, do the best. I still remember when I was in college I was driving with my dad. I was visiting for like the weekend or Christmas break or something like that and I was really nervous. I said to him there’s so many psychology majors, it just seems like, how am I ever going to get a job when I get out of school? There’s just so many. He said to me, and he was a school psychologist, my mom was a school nurse, like they were in that whole employment world. Like I didn’t have the base of business. But he said if you’re a straight A student and you’re the best, you’ll always have a job. No pressure there, just be the best and then you’ll have a job.
But the truth is that oftentimes the best don’t do the best. The truth is that you can be great, but if your clients don’t know that you exist, which is the marketing side, and you don’t have a very clear system for them to get started, which is the onboarding in the system side. You won’t grow nearly as quickly. So like we often see our Next Level Practice people grow to have a full caseload within three to six months because they have good systems, they have good marketing, they know here’s the exact to-do list that I need to do. Whereas people that are just trying your best you often flounder. I mean, that’s what I did. I floundered for years until I got some help, I got some coaching, I got some support to know, oh, okay, here’s how people make decisions around business. Here’s how people make decisions around working with you. Here’s how they decide if they want to come see you as a therapist.
People make decisions on really three simple things. Do they know you exist? Do they like you? Do they trust you? This process doesn’t have to be months long. It can be, hey I didn’t know that Bruce existed before five, 10 minutes ago. Now I know he exists. He went from the category of the entire population of the world that I don’t know to people’s names that I at least know. Then, well, I’m sure that if I talk to Bruce a little bit, I would hope that I would like him. Okay, so he seems like a likable guy. He is somebody that maybe is into things that I’m into. Then do I trust him? Do I trust to go to therapy with him? Well, I’d want to see, does his expertise line up with what my needs are? Is he in my area? Is he someone that has a reputation around town? So people can go through this know, like, and trust in just a couple minutes. They can find out from a friend on Facebook, oh, this therapist is amazing, they go check out your website, they read through it, they say, “Oh my gosh, that’s exactly what my daughter needs. She needs a play therapist. We’re going through a divorce and this is the exact therapist. I like this person. They have a dog. My daughter loves dogs. Oh my gosh, it’s amazing.”
Then you maybe have a quick phone call with that therapist and then they trust that this is going to be a good fit. So it can be very quickly but so many times therapists just think that because I’m the bastar or I’m doing really well that I’m going to fill up and that’s just not true, unfortunately. So what actually is true, well, the first part is that setting up a business is actually really easy. Some of you have set up the business, some of you have had a open for a year or more. I see a lot of Next Level Practice people are joining us as well. There’s really three major areas of setting up a business, the basic logistics. In most states, that’s an LLC or a PLLC. In California, that’s not true there. They want an S-Corp. Every state has their things that they want for your therapists. You’ve got your bank accounts you need to set up. You’ve got to have your linking between things to keep track of your bank accounts, probably some bookkeeping, like a QuickBooks, like the $9 a month thing. You want to have a website, so those logistical things. It’s more just knowing how to do it and in what order to do it.
Next is how do people know that you actually exist, so the basic marketing. There’s some very simple techniques around networking, around marketing, around what really sticks in people’s minds. That’s one of the things that is really fairly simple if you’re talking to the right people. And then the clinical side, you’re doing good clinical work. Just because we’re running a business doesn’t mean that we don’t keep doing trainings and CEs and all of that as well.
Truth number two is that a community of people is going to help you grow so much faster. You’ll get support from other people because if you have some sort of cohort or people locally that are accountability partner or groups like Next Level Practice, you’ll have that support amongst other people. You’ll also get that knowledge base. You’re not starting from scratch. You may feel like you’re starting from scratch, but there’s thousands of private practices out there. This car has been built before. You don’t have to start from scratch, from zero knowledge. You can talk to people and say, okay, what EHR do you use? Okay, we use Therapy Notes. I don’t want to build my website. Okay, do you use Brighter Vision or have it built by someone else? What is it that you did? Then also that accountability. We all are terribly busy. Whether you have kids or whether you have a partner or whether you’re alone or whatever, you have a lot of stuff on your plate. There are tons of things that every day are competing for your time, your energy, your brain, just your ability to pay attention. So having a community in some way helps you then be able to have that accountability to get more done.
Third, so many people have done this before. I’ve mentioned this before and when I see folks struggling in private practice, which we see every single day. So on our website we have a little popup and Jess is helping people all day long answer questions, point them to podcasts and blog posts and all sorts of different things and they’re just starting from scratch, not really realizing there’s a lot of people that have done this before. So being around those people that have done it before.
There’s three things that you really need when we talk about your first year of private practices. The first is access to knowledge that’s organized in some way. Second is that community of people that are going to support you, that are based on that proven track record and third, the tools of the trade to actually implement what you’re learning and what the people are supporting you in. If we look at your quarter one, quarter one would be your months up through your third month. In this time, we’re going to want to get those logistics really going. So getting your website up really early on is important because for one Google, the longer your website is out there, that really helps you rank higher over time. So you want to get that out.
I would say it’s as essential as a business card. So if you don’t know your name, let’s work backwards from your website, you probably need to have a name, I highly recommend not just using your own name. We have a whole script and way to walk through that over on practiceofthepractice.com. Just type in how to name your practice and that’ll walk you through that. We have a bunch of resources if you haven’t figured that out. You want to get your website going. You want to get your marketing going, and so your marketing, what’s that look like? Having probably some, it could be business cards, but more importantly just meeting people. You can go onto Psychology Today and find people that are doing a similar niche as you and you could also go on there and find people that are in an associated niche.
Say you’re a play therapist, you may want to reach out to couples counselors and say, “Hey I imagine the couples that come to see you, those that have kids, those kids might want some therapy also, and I’m a play therapist.” So finding people that could refer to you. Getting that logistical flow, so thinking about that user experience. I’m a person that the night before I call therapy, like what do I write in my journal? What do I, what’s that breaking point for me right before I decide to pick up the phone, is it my kids saying I’m just so sad at school, I don’t have any friends? Okay, so then thinking about, well, how do I market around that? Did your kid just say that they’re so sad in school and they don’t have friends? I would love to help.
Then from there, what we want to do is we want to then say, well, what’s that flow? So they Google you, they come to, they Google counselor or kids counselor, Traverse City, Michigan, then going into, and they go to your website and is it very clear? How do they contact you? How do they schedule? Are they going to have to call you or do you have some sort of digital schedule that they can just schedule a phone call or they can schedule that intake appointment? Do you answer their questions of do they take insurance? Do you, is it private pay? How does that work? Also, in that first quarter, you’re going to want to get some blogging going. I recommend that you try to get at least half a year of blogs done as soon as possible. So if you can get 26 blog posts up and have them start to link to each other, you are set from a blogging perspective for a while.
So just thinking about it, like if you did a series on anxiety, okay, what are five different blogs you could do on anxiety? Well, you could have one that’s about changes in the seasons. You could have one that’s like anxiety at work, anxiety with couples, five treatments for anxiety other than prescriptions. So thinking through maybe a series and doing a handful of those, just writing and writing and writing, that’s going to help you start to rank and Google very quickly. You’re also going to want to sketch out who is your ideal client, not your idea client, your ideal client. So little misspelling there. Sorry, I just went through the slides this morning to make sure there was nothing, but there’s always something.
So ideal client, who’s your ideal client? Where do they live? Give them a name. Give them an age. What is it that they’re struggling with? What are their pains? What are their successes? Are you going to be insurance-based or private pay? Get those basic systems. Then networking. Networking isn’t you going to some networking event and throwing your business cards? It’s just meeting new friends, meeting new people in the community that are doing something similar. Oftentimes, introverts are better at networking than extroverts because they’re just are good at small group situations. They’re just grab coffee with people. Find that naturopath, find that yoga teacher, find that pastor, take them out for a coffee or a kombucha and say hey, “I’d love to just learn about what you do. I’m new to the private practice world and just trying to meet people.”
Within the, by the second or third month, typically we see 10 clients per week. I say $90 a session just because I would much rather give you numbers that are so conservative that you can blow them out of the water rather than you see numbers and say, Joe, that’s so unrealistic. So if we just say $90 a session, I would say most of you could easily start at $125 a session, but to account for other markets, want to say that. So within that last, within that two to third, second and third month, you’d be at $7,200 for the year so far. Then if we look at quarters two and three, so months four through nine, you’re going to want to amp up that networking build more of the branding. If you don’t have a logo yet, definitely have a logo.
Then really looking at niche specific talks. So what’s that look like? If you help kids connect with charter schools, connect with private schools, connect with PTO in the public schools, find places where you can give niche specific talks. Sometimes people feel like they have to have thousands of Instagram followers and they have to have all these people following them. Think about what it actually takes to have a full practice. You’re talking 20 to 30 sessions a week, which means maybe 40 people have reached out to you. You don’t need that many. I mean, if you get in at one school and get a good reputation and that first person comes, they’re going to talk about how you’re a great therapist. If someone comes in for couples counseling and it blows their mind what’s going to happen is they’re going to tell their friends.
I had a walking group once. It was all of these wives of doctors and one of the wives, she and her husband came to see me and within the year, every single couple within that walking group was seeing me in therapy. I couldn’t tell them that and they’d all talked amongst each other, but I obviously couldn’t confirm or deny that. But this whole walking group they all ended up seeing me. So sometimes you get into these groups that spread the word about your work. Then thinking about who is connected to your ideal client, more and more really refining, that first quarter, it’s sort of like a big, like, let’s just see what works. Let’s throw spaghetti at the wall. Quarters two and three is really saying, okay, what’s working here and what’s the 20% that’s giving me 80% of the results?
There was a pastor when I moved back to town that he gave me probably six to 10 couples or families a year. I was networking with a bunch of pastors, but he was the one that did it. So who did I develop the relationship more with? It was that pastor. We’d have breakfast once a quarter together and just talk life so he knew who I was as a person and then he would refer to me. All right, so at that point, 15 clients or so, per week minimum, you’re at $90 a session, really staying conservative with that. So over those months, that’s $32,400. I’m basing this on a 48-week year so that you can have four weeks off also just for those numbers.
Then in that last quarter, for your first year, you’re going to want to think about should I start adding clinicians? If we think about Brian who is saying I’m full. I quadrupled my caseload best month ever. Like, he’s going to want to start to think, okay, after seven months, I am pretty much where I want to be. I would actually say when you’re at like 70% full, that’s when you want to start looking at adding clinicians if that’s a goal of yours. For many of you that’s not. So we might want to look at other streams of income like podcasts or e-courses or books or speaking or things like that. Then you’re going to want to start looking at interviewing people and mirroring your branding of your practice. So in your practice saying, okay, so, so far I’ve been known for helping couples. Who are we getting referred to that we’re turning away? Why are we turning those people away? Do we want to have a clinician that can potentially help there?
In my practice I had an attorney that referred to me a bunch but she wanted some custody assessments for divorces. I didn’t want to do that work. I could do that work, I didn’t want to do that work. So my next hire, guess what it was, it was a psychologist that did custody evaluations because people were driving two hours south to Grand Rapids to be able to get these custody evaluations. So finding those people that you’re referral sources are asking for, looking at all those different areas and then looking at how do you take hats off. In that middle column, I didn’t say VA, so virtual assistant, looking to have a virtual assistant that can start to answer your phones, they can check your email, they can follow up on scheduling, they can really do those things because if you are doing all of that’s going to limit the amount of clinical time that you can do.
So in that last quarter, looking at how do I take off hats? Why am I doing the accounting? Why am I doing the bookkeeping? Is that something I can outsource much cheaper? Because typically you can outsource it and then if you can go do counseling, it’s going to be a lot easier. So you’re starting to build that business instead of you doing everything. At this point minimum being at 20 clients per week maybe we give you a raise to a hundred dollars per session, you’re looking at $2,000 a week and if you had a W2 or 1099 that was seeing even just six people a week, maybe they just work two evenings a week at $90 and you get 50 percent of that, that’s an extra $270 a week. So in those final months, we’re looking at $27,240 and then for a total with that year, very, very conservative of $66,840.
We’re going to look at a few other factors to consider. With this just as a baseline, let’s look at some of the expenses. I mean, so for your rent, not knowing your market and maybe higher, maybe lower than this. If we had a budget of $1,500 a month to rent an office that’s $18,000 a year. Your EHR, your G-Suite, internet, phones, liability insurance, and accountant, attorney, all through these things. Office drinks, I recommend having a little refrigerator with fancy, nice little drinks like Starbucks or you know LaCroix or coconut water, something like that. Then just having some discretionary money. There’d be about $30,000 in expenses for a full-time or more than full-time practice. Now, 18 grand of this is rent. So if you go telehealth, that’s going to save you a ton of money.
Our friends at Noble have run their own clinics, worked with thousands of clients, and have seen firsthand the burnout and stress that can come with heavy caseloads, difficult topics, and a lack of time. With these things in mind, Noble built their app to support therapists by making between sessions support easy and offering and opportunity to build passive income. Now with new CPT codes coming in 2023, that will allow therapists to offer reimbursable remote monitoring support, Noble is revolutionizing remote patient monitoring. The team at Noble’s built a program that you can quickly implement to allow you to reimburse code 989×6 for cognitive behavioral therapy, CBT remote monitoring.
This is so exciting for therapists and clinics. This new CPT code, which is coming into play in January, 2023, will allow you to make more money per hour and earn passive revenue. Noble’s system provides everything needed to reimburse objective data gathering, device integration, assessment and data stream display measurement and integrations, HIPAA compliant integrations into other EHRs, and real-time and immediate interventions for elevated symptoms. If you’d like to discuss adding their plug and play remote patient monitoring for 2023 so you can reimburse the new CPT codes, schedule a time to talk with Eric, their CEO at pop.noble.health. Again, that’s pop.noble.health.
But how do you decide your rate? So let’s walk through a few ways that you can decide your rate of you’re not going to take insurance. If you take insurance, insurance tells you your rate. You can try to negotiate it. In some markets that works in other markets, it doesn’t work. So start with your lifestyle. Look at the salary that you want to make, plus the taxes you would have to pay, and then your cost of business. Say you want to take home $80,000, your taxes will be about $24,000 or so. You want to talk to an accountant to get a better idea of that. Then our previous slide of $30,000 that means $134,000 needed for that lifestyle. Now if we then look at how many weeks we want to work, say we want to take a month off a year then we would just divide out that 134 by the number of weeks, so that means $2,792 per week.
If we say, well, how many sessions do I want to work in a week? Some people may say what I’m a highly sensitive person and I need to only work 12 hours a week. Okay, great. We do this at 12. Some people, they’re a workhorse. They just want to do 30 sessions a week. Okay, great. So we just run the numbers for yourself. You can always adjust it and say, oh, that’s like really a lot per session. That’s like $900 a session. That’s not going to work. Okay, maybe you need to work more than three hours a week. Then just running, is this even reasonable? So with those numbers, if you’re going to work 20 sessions a week, that means you need to average $139.58 per session. If we go back to that, those quarter 1, 2, 3, 4 you’d want to base it on $139.58 a session instead of that $90 per session. Another way is you decide your rate by just starting with the going rate. Look at what insurance and private pay is in your area. So typically $125 to $175 and start charging that and raise it as you go. So this is —
Hey Joe, there is a que there is a question that says isn’t it also based on what others are charging?
Yes, well, there we go. It’s like they knew what our next slide was. Yes, so that’s another way to look at it, to look at what other people are charging. Now I started at $70 a session. I said that at the beginning. Now when I ended up selling my practice, I was at $225 per session and the average in Traverse City was still for private pay, $90 per session. So there is often a false assumption that you have to stick around what your people in your area are charging. Now, I would actually argue that when you’re at about 60% to 70% full, that’s when you need to raise your rate again by a substantial amount, by $25 to $35 per hour to make a big jump. Because you’re getting close to being full so it’s a great opportunity to be able to raise your rates again. So if you’re at $125 to jump to $150 to jump to $175, $195.
It’ll give you a heart attack. Like we do this all the time in Next Level Practice in our what’s working where people say, I’m full, I have a waiting list, I don’t want to hire clinicians and I say, “Well, then raise your rates.” They’re like, “No, I can’t raise my rates.” I say, “Well, okay, let’s walk through this. You’re already turning these people away. Why not give them the opportunity to say yes for a higher rate?” Oftentimes we see people climb very quickly with, with their rates which I would recommend whether or not you do the first exercise or this one. So there is money on the table though. Imagine you’re doing 20 sessions. Maybe you want to then have a clinician that’s in your office, so Monday through Thursday say three to seven you’re done, you want to be done at three, that’s four sessions a day times four days. That could be 16 extra sessions if they’re on the hour. Plus you could also do them on the 45 minutes of the hour.
You could also then have someone on Friday, Saturday and Sunday. There’s easily 25 sessions there. So we’re looking at 41 extra sessions that you wouldn’t be working that even if they were just charging $90 per session and you got 50% of that times 48 weeks, that’s an extra $88,000 per year. Imagine if that rate was $125 a session. Imagine if they worked 50 weeks a year. imagine if even it was like 20 sessions a week, there’s extra money on the table that you could be making there. So here’s a couple ways to keep costs down. We looked at that $30,000 a year as just a baseline. I would say start with telehealth. I mean telehealth is so convenient for people. They don’t have to find childcare. Their kid can be in the iPad in the other room. It can be such a easier way to get started.
You can also do this as a side gig. You can do a counseling practice as a side gig, as just like a Monday night. You’re going to just start seeing people. You’re going to slowly build it. You can take much bigger risks when this is a side gig when you have your full-time job. Build your own website, do your own marketing, wear multiple hats. You can only invest in the essentials like forming a company, getting your website going, your liability insurance and then adding billing software later if you end up taking insurance. You can use your own phone and your own internet to keep costs down. You can find a shared workspace where you only use it when you need it. Obviously, you want it confidential. You don’t want one of those like hipster ones with all the glass windows and stuff where everyone’s going to see all your clients. But find a shared workspace where you can use it only when you need it. And learn from others who have done this before you.
One of our folks in Next Level Practice, Lauren posted this right after her ideal client had come to their first appointment and she said that moment when your ideal client walks out of their first session and you realize your marketing is working and that your ideal client is awesome, and this was one of those gifs of like the little girl going like, yes, yes, yes. I mean that’s what we want. We want to have a business that we love, that feels fun. We need people like you to thrive in private practice. We need more dedicated private practice owners that are in it to grow a practice, to lift up our communities. One question I asked myself when I left my full-time job is, would I rather try and fail or never know? Because it was such a hard decision, I was the only income earner in my family. My daughters had had heart issues. There were, so I had just come off of the heels of cancer treatment and to be like, okay, I have great healthcare. Do I want to make this risk? But I kept saying to myself like, would I rather try to jump and do private practice full-time and just see if I have it in me and maybe fail and have to go find another job or would I rather never know? For me it was like I would rather try a and see what I have in me.
Then lastly, think about the multiplication for your community. So imagine you now see 20 more people a week. That’s 20 more folks that are getting mental health access than did before you started your practice. Imagine you hire some clinicians and you build a small group practice and over time they’re each seeing 20 people. Now a hundred people in your community have access to mental health care. There’s a multiplication effect. Then also if you’re hiring virtual assistants locally, if you’re hiring accountants locally, that impacts your community in a way that’s different than if you just stayed in your full-time job.
Hey Joe, there’s a good question in the chat. Yes, it’s from Kristen. If you are currently working at an agency with a non-compete, but want to start on your own as a side gig, what are some options that you would recommend?
Okay, so I would, first I would read through your non-compete to really make sure that it’s valid because a lot of times it says non-compete but really what they mean is they don’t want you doing it at the same time or in the same industry. So I don’t know the dynamic with your supervisor, but if you can talk to that person, like what does this mean? Does it mean like, okay you guys serve this audience. If I wanted to do this, does that count as a non-compete? I would also, if you know any lawyers or if you know any other people that may have gone through that process, there’s certain communities where non-competes are rarely upheld in court and there’s other communities where they are.
Here in northern Michigan, the attorneys and the, I’m sorry, the judges up here really hold non-competes. My brother-in-law, he got a job in an ophthalmology clinic and within a month saw that they were doing Medicaid fraud and he reported it, but he still had to drive 90 miles away to be able to do ophthalmology. So I think it’s crazy. So I would look at some of that as well. If you can do some of that building or if you’re just looking at wanting to build the infrastructure, I would definitely do that because if the non-compete says say 12 months or I would, I’d be interested to know how long the non-compete is, because say you’re blogging, say your ranking and you just say opening January, 2023 or taking clients starting June, 2023. You could get a lot of steam saying I have a non-compete, I’m going to honor that but as of this date I’m going to start seeing clients. So I think Next Level Practice would really help you with that. We have tons of people that are doing more of the infrastructure side before they do the practice.
Then Eric has a big question, why don’t you unmute yourself, Eric, and can you just ask that question because it’s like, it’s long. So let’s hear your voice
More concisely than I wrote it but basically wondering about resources for the LLC versus PLLC decision. Then just curious what you suggest on how to find a lawyer because lawyers seem to not have great SEO and I’m just struggling to find someone with my Eric and business focus.
Eric, remind me where you live.
I’m in Massachusetts.
So around the LLC versus PLLC, it depends on your state. So in Michigan, if you’re licensed, you have to be a PLLC so there’s no question for us here in Michigan. In most states it makes sense for you to have the PLLC for your legal protection and most states set it up that you have to do that if you’re licensed. I would look at that. I don’t even know if it’ll be an option for you. I would say if you can’t find someone, I would maybe just call your local chamber of commerce and be like are there any business lawyers you can recommend? You’re right that they have terrible SEO. I’ve found most of my business and accounting connections just through getting to know other business people.
Another option might be BNI, so Business Networking International. BNIs will meet every week and they have one professional from each thing, so they have one plumber, one accountant, one lawyer. Reach out and just say, “Hey, I’m looking for a business lawyer.” I would reach out there and then if you have any local counseling group, maybe reach out to them. But in most states it’s hard to find a private practice business lawyer. A general business lawyer will most likely be good enough for most situations. We have time for a couple more questions here.
If you were to look back at your first year, what’s one thing you’d do differently? Good question.
Good question. I would say I wish I would’ve gotten a good quality website up faster. I didn’t upgrade Mental Wellness Counseling until, I don’t know, a few years in. At the time it was like an extra $500 to make this sweet website. I mean, now it would probably be a $1000, maybe $1500. So having a good quality website right from the get-go because I think people make, especially now make such quick buying decisions based on a good-looking website. I would say that, and I would say if I in the first month had said I want to just like network with like 30 people in 30 days, just go crazy with the networking. I had so much internal, like, I don’t want be salesy, I don’t want to be slimy and when it comes down to it like, it’s not, you’re just meeting people and they’re really happy you do the work.
I helped angry kids and so these angry teen boys had no one to see. More times than not, people would be like, “Oh my gosh, I hate seeing those kids. I would love to send them your way.” So I would say network like crazy and get your branding down really, really quickly. Then lastly, I would say I wish I had hired a virtual assistant to answer my phones and reply to my emails because I bet I missed, I would only be speculating, but I bet a third of my clients I could have gotten in faster or like I could have grown like a third faster had I had someone answering the phone and actually responding to emails.
Then Nita also said two things, what’s the deciding factor for you to raise your rate, like the timing and the amount. Then she also said, I so appreciate tuning in today from the bus. Please tell Joe.
That’s awesome. I mean, I would say first and foremost, it’s just like when you’re, when you feel busy or you feel like, oh, that did not feel like what I want to be doing right now. Sure we want counseling to always feel great, but if you’re feeling overwhelmed, that definitely means it’s too late. Then I would work backwards and say when did I really start to get too busy for this? So I would say if you want to be at 20 sessions a week and you’re at 15 that’s 75% full. If you’re above 60% to 70% full, you definitely need to be raising your rates. So I’d say throughout the year you want to be raising your rates by $25 to $35 per session. Then try to realign every calendar year with your current clients. So in October, November, say something like you came in at the rate of $125, I’m currently charging $175 as of January 1st. I’d like to move you up to $150 to try to align my sessions closer. So maybe you don’t make the full jump. If throughout the year you’ve gone from $125 to $200, that’s a big jump for most people. But to go up $25 to $35 per session for people annually, that should be expected.
That’s all we’ve got.
Awesome we’ll see you all soon. Thanks for coming. The Next Level Practice members, I see some of you joined here as well. Thanks for popping in. Thanks for letting me into your ears and into your brain today. Have a good day everybody.
What an episode. All right.
Noble’s been a sponsor all year long. They’ve been doing amazing things. This new CPT code that’s coming out in 2023 that’s going to allow you to offer reimbursable remote monitoring support. It’s crazy. It is revolutionizing remote patient monitoring. If you don’t get on this for the reimbursed code 989X6 for cognitive behavioral therapy, you are leaving money on the table. You are leaving extra support for your therapy clients on the table. You have got to check this out. Their system helps you be able to get objective data gathering, assessment and data stream, HIPAA compliant integrations with your EHR and real-time and immediate interventions. I mean, this is amazing. You’ve got to go schedule a time to talk with Eric, their CEO. He will walk you through this exact process of how you can get signed up. It’s not a hard sell. This is something that you need. Hea on over to pop, that’s [PoP], for Practice of the Practice, pop.noble.health, and you can find that time to meet with Eric.
Thanks so much for letting me into your ears and into your brain. Have a great day. I’ll talk to you soon.
Special thanks to the band Silence is Sexy for your intro music.
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