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:
- We are often told “we didn’t go in it for the money” and I don’t think that has to be true.
- Money in and of itself is not bad, it only expands what is already there.
- When we think differently about money, we can go after the health, relationship, and lifestyle goals we have
- 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:
My Response About Group Private Practice
To Which I Said
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:
- 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?)
- Is it maxed out in our area?
- 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:
- The socio-economic status of the area, which leads into the ability to pay.
- The dependence on insurance in the area that does not have out-of-network providers.
- 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.
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:
- Gaps in service
- Gaps in marketing
- 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!
Joe 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!