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Although many people would love to venture into the world of private practice business, it is not an easy world. According to studies conducted by the United States Small Business Administration, the survival rate of business enterprises is not very favorable. Only about two-thirds of businesses survive for two years or more. Not only that, but the number keeps on dwindling further down as more years pass by.
Plus, we don't learn this stuff in graduate school!
Less than half of the businesses established survive for six years or more.
With these statistics in mind, it only shows how difficult running a business can be! But how difficult is it to maintain a business? What are the top ten reasons why private practices tend to fall short in their lifespan?
Reason #1 | Resources are underestimated
Opening up a private practice requires more than financial resource and guts. It entails a more detailed process and planning than one might think. Aside from being able to have the needed capital, one must have a clear and concise plan on how to start the business.
Here are some things to consider:
Many private practices fail because owners don’t start with basic business principles. Being a great clinician does not equal having a great business. As long as you are not ready and prepared, you will be easily swept away by the turbulence of challenge.
Reason #2 | They don't have a specialty
If you needed hip surgery, who would you go to? Your primary care doctor? Of course not! In a crowded market, it's way easier to grow if you are known for a few things. For me it's that I help: Angry kids, frustrated parents, and distant couples.
Reason #3 | Low client satisfaction
Revenues, product quality and cost-effectiveness are very important in business, but are you offering good service?
Here's how new private practices let clients down:
Counseling quality and cost-effectiveness can attract a lot of consumers, as quality and cost are two of the most important things that consumers look for in products or services. However, as you improve your quality, you can improve your rates. Having great revenues gives ensures that the business can keep on running.
Client satisfaction makes the private practice continue to exist. Not knowing how to really communicate to the clients on their preference and suggestions can close your doors.
Reason #4 | They are too common, no uniqueness
When I first launched the Practice of the Practice Podcast, I did a lot of research. The only other private practice podcast at the time was the American Counseling Association. They had not posted in over four months. Thus, when I launched, right away iTunes ranked me #1 and I could say I was the #1 podcast for counselors in private practice. There was no competition!
In the business world, there is much competition awaiting everyone. The more common your business is, the lesser is your chance in winning. If there are a lot of counselors in your area, you have to set yourself apart!
So how do you tell your story as a private practice? How do you market those skills and niches?
One of the reasons that businesses fail is because the team lacks the marketing skills.
Clinicians have to clearly state the advantages of the counseling. Sometimes customers won’t know how great your practice is unless you present it through your website, social media, and traditional local media.
Reason #5 | Lack of planning goals
Many people who venture out into private practice don’t properly plan their outcomes. In my private practice consulting, I teach my clients about having one or two KPIs. A KPI is a “key performance indicator.”
A KPI is the bottom-line result of what you do well. For example, a KPU could be:
KPIs can easily get lost in the battle. It is not only in business but also in almost anything one should do.
Reason #6 | Too rigid and not flexible enough
Some private practice fail to adapt quickly to changes in the market, like custumer needs and competition. Private practices that thrive will move quickly. They will write blog posts about current topics and trendjack what is being discussed in the media. They’ll actively engage on social media and find new ways to enhance their website. Being sluggish in adapting changes can cause private practices to be left with few clients.
Reason #7 | They are scared of networking
Networking is just making friends. People want to do business with people, not businesses. They don't want to see a company. Think of networking as meeting new people to hang out with. Go to lunch, use reflective listening, engage, don't talk about your business, and get to know the other person. If people enjoy their time with you, they'll be more likely to refer.
Avoid these pitfalls and you’ll grow a healthy, thriving private practice that will increase your influence and your income!