[JOE]: This is the Practice of the Practice podcast with Joe Sanok, session number 415. Cyber Monday is right around the corner and our last cohort of Next Level Practice is starting on Cyber Monday. Next Level Practice is a monthly membership community where you get an ongoing support system for mental health clinicians, counselors, and coaches who want to start and scale their own private practice. We feature hundreds of trainings, live calls with experts and a robust library full of exclusive online content and a community that’s so amazing and supportive.
I mean, let’s be honest. Even if you have a PhD, odds are that you graduated without really knowing how to start your own private practice, let alone one that allows you to grow your impact and your income. Maybe you’re working for someone else’s practice and you’re struggling under their systems. Maybe you’re working out in the world of nonprofit and making less than you deserve. Maybe you’re working in both arenas and getting dangerously close to burning out, or maybe you already have a practice and it just hasn’t launched how you want it to. I want to invite you to head on over to practiceofthepractice.com/invite where we are going to be talking all about Next Level Practice and you can get access to this cohort. The prices go up in 2020 so I want you to grab and lock down the $88 a month price. Head on over to practiceofthepractice.com/invite to read all about it.
Welcome back to episode four of this series, all about starting and growing a group practice. I’m here with Alison Pidgeon, consultant with Practice of the Practice. How are you doing Alison?

[ALISON]: I’m doing great. How are you Joe?

[JOE]: I’m doing really well. I love this series because when I see people start a group practice, it’s one of the easiest ways for them to build extra revenue, but also to design the life that they want it. And it’s just so exciting for people to realize, “Wait, there’s a different way to do this than just being stressed and working all the time.”

[ALISON]: Yes. I love, watching people grow and make progress because then they get to the point where they’re like, “Oh wow, I have extra income and I’m not having to see as many clients.” And obviously, you know, it takes a lot of work to get there, but once they do, it’s like they’re so grateful that they did it.

[JOE]: Yes. I mean, I think about my friend Caroline who went through your group practice mastermind and, probably, yes it was probably about a year ago. I remember we were having lemonade on her deck and we were talking about kind of group practice and she’s like, “I think I just want to just do my own thing,” and she kept getting full, more full and more full. And then, she joined your mastermind and now I think she has an eight-office suite and it has three or four people working for her and then is subleasing some of them and it’s just like her life looks completely different than it did a year ago. And that’s because she got the right guidance. She was able to kind of understand the potential and also do it in a way that didn’t take up just a ton of time.

[ALISON]: Yes, she’s doing amazing things. And then in the middle of all that too, like the office that she did have, the building got sold and she had to move and she was like, “I don’t know if I’m going to be able to hire anybody until I move,” but like she just made it work and like she made so much progress so quickly. It was so cool to see.

[JOE]: What’s really funny is while she was looking for that office, Mental Wellness Counseling, the new owner was looking for an office and they were both looking at the same one and Caroline ended up getting the office that Mental Wellness Counseling person wanted, but where they landed, it landed on a great spot. But it was like all these clinicians wanted that office. It’s kind of funny though, to see that. So—

[ALISON]: Wow.

[JOE]: Well today we’re talking all about managing staff systems, turnover, finances, all that stuff that are kind of maybe more than the nitty gritty of maintaining a group practice and helping it thrive. You know, at the beginning it’s fun when you’re getting started and you’re just like, “Yes, I’m going to add people. I’m going to have this vision and we’re going to impact the community.” But then, the reality hits. A year in or so and you’re like, “I got to manage staff and people are leaving and we need systems.” Where do you even start with all that when you’re working with clients?

[ALISON]: What I tell people is that we have to, step one, set up a really good foundation for your group practice because you are going to probably start out with just a couple of people, but then you want to be able to scale as big as you want to scale. And if you don’t have those good systems in place, then it’s not going to work, or you’re going to end up like a year-end realizing, “Oh wow, because I didn’t sort of plan this out ahead of time, now I made a mess of things.” So, I make sure to really emphasize that when we get started because otherwise it’s always easier to do it right from the beginning rather than clean up a mess.

[JOE]: Yes. So, what would be some of those just like essential things that people should plan on as they look at managing their staff, their systems turnover? Like what do they need to think through and how can they clean it up if they’re in it and they’re just like, “Oh, this isn’t working?”

[ALISON]: So, the way I look at it as the owner is actually my most important asset is the therapists and if I keep the therapists happy, they’re going to keep the clients happy. So that is my number one priority. So just having that mindset then helps me to think through how they would want to be treated, what sorts of things I want to offer to them as part of working for me and that can look different depending on how you have things set up if you have contractors, if you have W2 employees, all of that kind of stuff. But, yes, my main priority are the therapists. And, I think a lot of times people don’t think about being intentional about how they’re going to communicate with staff, especially when there is a problem and so I came up with a system where I meet with the staff once a month individually, and then once a month we have a staff meeting with everybody. And I ask them very specific questions in those individual meetings because I find that little problems come out in those conversations and it keeps little problems from becoming really big problems if we’re intentionally making a point to talk to them on a regular basis.

[JOE]: I love that idea of viewing your therapists as your most important asset and that if you keep them happy and motivated and connected, that that’s going to just kind of overflow into all these other areas. I think a lot of people will say, “Well, I want like client surveys and see what the clients say,” but I love that idea of just starting with the clinicians.

[ALISON]: Yes, I wholeheartedly believe that because I think if they’re happy, then they’re going to do great work and then they’re going to take care of the clients. So, it’s got, that’s going to take care of itself.

[JOE]: So, let’s, I want to talk a little bit about like non-compete clauses and just the risk of somebody stealing my practice from me, because that’s one of the bigger pushbacks I hear from people when they especially want to have a clinical director or something like that. How do you think through that?

[ALISON]: I have not yet done a noncompete. I would say, the way I have my model set up with independent contractors, it has happened that, you know, they come on board, they sort of get the taste of what it means to be self-employed and run a practice, and then I have had a few people leave to start their own practice and, unfortunately it is what it is. I wish they would’ve stayed, but I don’t want to keep somebody there who doesn’t want to be there. And I think too how I have mitigated that is I always am looking for new clinicians and I always sort of have like people waiting in the wings. So, if somebody leaves, then I go back to the person I’ve been talking to like, “Hey, I have space now. What do you think about coming to work for me?’ So, that’s worked out for me pretty well without having to put like a noncompete clause in the contract.

[JOE]: And do you get worried about that as you kind of step back from the clinical work that people might just go start their own thing or do you just kind of feel like, “Well that’s just part of it. If people do it, they do it?”

[ALISON]: Yes, I kind of accept that that’s part of it. The other thing that I’m in the process of doing, and I don’t think we’ve talked about this yet, Joe, is, I’m going to switch all my contractors over to be W2 employees as of the first of the year and part of that decision-making process was so that I could better retain people and also recruit new clinicians. There’s generally a shortage around here and a lot of the feedback I get when I try to hire is like, “Oh, I really need health insurance. I need the benefits.” So, I am going to make that switch and I’m hoping that helps with like the longevity of the staff.

[JOE]: Well I think then, it allows you to have a little bit more control and to kind of give some kind of solidified salaries as well if you want to.

[ALISON]: Yes.

[JOE]: So, what else do people need to know around kind of finances and just the nuts and bolts of what it takes to maintain a group practice?

[ALISON]: I think in terms of finances, I get a lot of questions about this too. Like people don’t understand exactly how they should, like how the money flows through the business. So, especially if you have contractors, I’ve seen it happen two different ways. So one way is, you know, especially if you take insurance, you could have it set up where insurance pays the clinician and let’s like, say you have a 60, 40 split and then the clinician pays you your 40% and they keep their 60. And then I’ve seen the opposite way, which is how I do it, where the money flows into the business and then I calculate out their 60% and pay them on a regular basis. So, I think the first way creates a lot of paperwork and hassle for the clinicians. So that’s why I have chosen to do it the way I do it, which is the money flowing into the practice and then paying them out their share because I figure they have come to work for me because they don’t want to deal with a bunch of paperwork hassles and like insurance companies and EOBs and all that stuff. So, that’s how I have it set up.

[JOE]: And it seems like if they wanted to do all that, they really should just start their own practice.

[ALISON]: Yes.

[JOE]: Cool. So, any other things around just management systems, turnover, those, just any tips that you think you want to make sure that people get before we wrap up this number four?

[ALISON]: Yes. Again, in terms of finances, something that I found really helpful was I found an accountant who does financial projections almost like what a CFO would do. So, for example, with this switch that I’m making to everybody to become W2 employee, obviously their rate of pay is going to change because now I’m paying more than the expenses and I’m paying some of the taxes and all of that kind of stuff. So, I came to her and said, “I don’t know what to pay them as W2 employees. Can you look at my, all my sort of accounting data and help me figure this out?” And she ran these financial projections for me. So, that’s the thing that I try to really stress to people are like, don’t make those decisions in a vacuum. Like actually run the numbers to see, because people think like, “Oh, I’ll just pay my clinicians better than everybody else and they want to come work for me.”
And then pretty soon they’re a year in and they’re like, “I’m making no money because I’m paying them too much.” And that’s never a good situation to go back to your staff and say, “Oh, by the way, I’m paying you too much. I need to pay you less.”

[JOE]: Right.

[ALISON]: Yes. So, I spent a good chunk of change getting these financial projections done, but now I feel really confident in what I’m offering them and knowing like I’m going to be able to cover all my expenses and turn a profit with what I’m going to pay them.

[JOE]: Well, now, I think that’s such great advice. In the next episode, our final one, we’re going to be talking about transitioning to a CEO mindset and then potentially even exiting. So that’s going to be our final episode of this group practice discussion. Alison, thanks so much for being on the show.

[ALISON]: Thank you. It was fun.

[JOE]: So, if you are ready to start and grow your private practice, not just your, nope. If you are ready to start and grow your group practice, you have got to join me and Alison on a master class call on December 10th. It’s going to be at 2.30 Eastern, 1.30 Central, 12.30 Mountain, or 11.30 Pacific. In this we are going to be talking about everything group practice; what do you need to have it set up and we’re going to have ample time for your questions. So, join us at practiceofthepractice.com/grouppracticewebinar. Again, that’s practiceofthepractice.com/grouppracticewebinar in December 10th. You’re going to learn all about starting and growing your group practice.
So, if you want to get some extra help from Alison and myself, we are doing a webinar on December 10th at 2.30 Eastern, 1.30 Central, 12 Mountain, and 1130 Pacific. Head on over to practiceofthepractice.com/grouppracticewebinar and you can get all the information about that webinar, register for it and get some extra help on starting and growing your group practice.
Special thanks to our sponsor Next Level Practice. For you to sign up for next time’s cohort which kicks off on cyber Monday, head on over to practiceofthepractice.com/invite. We would love for you to join that community and rack out your private practice. Also, special thanks to the band Silence is Sexy. We like your intro music.

And this podcast is designed to provide accurate and authoritative information in regard to the subject matter covered. It is given with the understanding that neither the host, the publisher or the guests are rendering legal, accounting, clinical, or other professional information. You want a professional, you should find one.