Is it possible to grow your practice too quickly? How do you handle office space when half of your clinicians are doing telehealth while the other half is in the office? Why is it a good idea to stagger the hiring process?
In this podcast episode, Alison Pidgeon speaks about the most common questions group practice owners ask.
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Whitney Owens is a Licensed Professional Counselor and Private Practice Consultant. She lives in Savannah, Georgia, where she owns a group private practice, Water’s Edge Counseling.
In addition to running her practice, she offers individual and group consulting through Practice of the Practice. Whitney places a special emphasis on helping clinicians start and grow faith-based practices. She hosts a podcast to help faith-based practice owners called the Faith in Practice Podcast.
Whitney has spoken at the Licensed Professional Counselors Association of Georgia’s annual convention as well as Maryland. She has spoken the past two years at Practice of the Practice’s Killin’ It Camp Conference. She has also been interviewed about mental health issues on several media outlets including WSAV in Savannah and in the Atlanta Journal-Constitution. Whitney is a wife and mother of two beautiful girls.
In This Podcast
- Should I be taking on additional office space?
- What does it mean to grow your practice ‘too quickly’?
Should I be taking on additional office space?
If your group practice uses or needs physical office space, due to the pandemic there is a lot of office space that has opened up because some practices have gone online and are doing telehealth. There is then space for negotiation on prices, and you could perhaps land a good deal either renting or buying.
Ask yourself some questions to help you ascertain whether to move online or keep a physical space:
- What do the clients in your area prefer, to go into an office or have the telehealth option? Determine what the comfort level is of your local area as well as taking into account your own preferences and those of your clinicians.
I think you need to ask yourself how big you want the practice to be and I know that might be a hard question to answer, so if you know ‘okay yes I want to hire a 6th therapist and that’s about as big as I want to get’, then great [because] you know then how much office space you’ll need. You would probably only need two to three offices for six people.
- If you don’t know how big you would like to grow, then be careful about jumping up too soon. It would depend on the number of clients in your area and how widely they are dispersed.
- Consider your budget. Run some theoretical numbers to see how much flexibility you have in terms of growing your practice into a new location. Keep your rent amount around 10% of your gross revenue.
- How much or little is your staff going to use the space? Perhaps half of your clinicians work from home and the other half work in the office.
What does it mean to grow your practice ‘too quickly’?
One of the biggest reasons businesses fails is because they grow too fast and that means that your initial systems or processes that you set up cannot handle the volume that your business has increased to.
When you set up your group practice, think about different ways in which you can track the relevant data points such as clients seen, money collected, insurance notes needed, and so forth so that you can easily see how the practice is growing and how fast that growth may be.
The one thing that a lot of practice owners don’t realize … is that there is going to be a tipping point where you grow to a size where you’re going to have to structure things differently.
Consider the price of bringing on a new therapist because hiring a batch of clinicians at once can cost you a significant amount of money. It can be a good idea to stagger your hiring process in between bringing new clinicians on board.
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Meet Alison Pidgeon
Alison is a serial entrepreneur with four businesses, one of which is a 15 clinician group practice. She’s also a mom to three boys, wife, coffee drinker, and loves to travel. She started her practice in 2015 and, four years later, has two locations. With a specialization in women’s issues, the practices have made a positive impact on the community by offering different types of specialties not being offered anywhere else in the area.
Alison has been working with Practice of the Practice since 2016. She has helped over 70 therapist entrepreneurs start and grow their businesses, through mastermind groups and individual consulting.
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Grow a Group Practice is part of the Practice of the Practice podcast network, a network of podcasts seeking to help you grow your group practice. To hear other podcasts like The Imperfect Thriving podcast, Bomb Mom podcast, Beta Male Revolution, or Empowered and Unapologetic, go-to practiceofthepractice.com/network. .
Hi and welcome to the Grow a Group Practice podcast. I’m Alison Pidgeon, your host. Today, I am doing a solo episode and talking all about commonly asked questions at group practice owners ask And I wanted to kind of share with you a little bit how this topic for this podcast episode came up. So Whitney Owens and I, who is my counterpart at Practice of the Practice have a membership community called Group Practice Boss, and it is for established group practice owners. We started it last October and it has just been so fun to help this group of people. They’re so engaged and positive and supportive of each other. There has been all these cool connections happening, like people have been sort of creating their own small groups based on their interests. There were two owners who actually live in different States, but like drove halfway and spent a weekend, like making plans for their business together.
Just to see that kind of connection happening and that kind of support happening is just so cool to be a part of. So needless to say, Whitney and I just love running this group. And I noticed that questions which are posted on our Facebook group that were common or sort of got a lot of engagement or a lot of attention, I thought might be good to kind of answer on a podcast episode since they come up so often. That way the next time somebody asks, I can point them to this episode. So we’re going to talk through a few different things today and obviously these are things that aren’t cut and dry. So it’s not just like a one size fits all answer. It’s kind of something you have to think through the different facets to figure out what the answer is for you.
And as I’m sure building a business is never simple or never cut and dry. There’s always nuances to it or just things you have to think about related to your particular situation. So let’s dive into the first question. So the first question is, should I be taking on additional office space? And I think why this question is so hard is because when you own a group practice and it is going well, and you see it starting to grow, there’s always this like chicken or the egg problem of, “Should I go out and rent more space knowing we’re eventually going to fill it, even though I can’t fill it right now? Or should I wait?” Or like bursting at the scenes and then try to find office space. And so this has always been a question that’s perplexed people ever since I’ve been doing this work for the past several years. and obviously it has just got even more complicated with the pandemic.
So as I’m sure you’re all aware, a lot of therapists have been giving up their office space because they haven’t had clients coming for in-person sessions. They’ve just been doing telehealth since March of 2020 and so on one hand thinking about taking on additional office space could be great because you could potentially get a great deal. Lots of people are vacating their office space. You are in a really good position to negotiate pretty aggressively to get really good terms to get lower rent, all of those kinds of things. So I think there’s a few things you have to ask yourself. One is what is happening in your area in terms of clients expecting to either come into the office or do telehealth or have an option.
So I’ll give you an example. It’s interesting because I talk with practice owners all over the United States, how in different parts of the country, there’s definitely different perspectives on the virus. So in Texas, for example, my clients there have told me it’s like, the virus doesn’t exist. No one’s wearing a mask. Everybody expects to be seen in the office and that’s just sort of the dynamic that’s happening in their local geographical area. And then there’s places and other parts of the country like New York, where nobody is expecting to be seen in the office. Everybody is doing telehealth, nobody’s pushing back on that at all. so, and I’m sure there’s a variety of everything in between, right? So I would say the majority of people where I am in Pennsylvania are also doing mostly telehealth. There’s some people who are seeing a few people in person, but I would say telehealth is still widely accepted although we have been getting a few more requests recently for in-person services.
So all that being said, you have to kind of determine what are the expectations regarding your local area, but then also like what’s your comfort level obviously with seeing clients in person. And do you have some kind of a plan when you think you’ll be going back largely seeing clients in the office again or not. Maybe you’re not going to at all. So again, something you have to answer for yourself, but I know for my practice, we’re looking at potentially expanding into another county and I’m thinking at the earliest, which I’m doubtful about, we would be in the office in the summer time. I’m thinking more likely that we will be back in the fall and I think there’ll be some sort of hybrid where staff will be in the office part of the time and working from home part of the time. I think a lot of clients have found the convenience of telehealth and want to continue doing it that way.
Obviously some clients are going to want to be back in the office and depending on the type of therapy you do and your client population, obviously that may be a hundred percent of your population that wants to come back into the office or not. So back to our question, I know that this is a very long-winded explanation, but should I take on additional office space? So I think you need to ask yourself, what is your ultimate vision for how big you want the practice to be? And I know that might be a hard question to answer, so if you know, “Okay, yes, I want to hire six therapists and that’s about as big as I want to get.” Then great. You know then how much office space you’ll need. You probably would only need two to three offices for six people.
If you don’t know how big you ultimately want to grow, I think that’s where it gets a little bit more tricky because, what do you do when you outgrow the space that you’re in? You jump to a bigger office suite with several offices and then you move offices again when you outgrow that one or you open a second location? Again probably depends on the geographical area that you’re in and how convenient it is for people to get to that office. Whether you grow bigger in that one location or you open multiple locations that are maybe somewhat far apart from each other, then it makes sense to have multiple locations. But I think one thing that I learned from growing is that I started out in one office. We outgrew that office and fortunately down the hall, there was a two office suite. So we moved down there and then we outgrew that office and then fortunately in the same building, there was another office that we took on, but it was in a separate entrance and it caused all kinds of confusion for clients, which entrance they were supposed to go into.
And then we outgrew all of that space. And then we had to look for a new space except I wanted to purchase space. So then I had to figure out, do we just sort of stop growing until I purchase this space? And that whole process took about a year. So really I was holding back the growth of the business because I was looking for space and didn’t want to keep renting. And it wasn’t easy at the time to find space especially for a therapy office, which maybe I’m just really picky. But I have certain things that I look for in a space, obviously soundproofing being super important. So that wasn’t convenient. I rented an office like in a co-working space and then had one therapist over there, but they sort of always felt like they were isolated from the rest of the group.
So that wasn’t great either. So I think the other thing you have to consider is finances. So obviously to go out and rent a bigger office space, that’s a bigger piece of your budget and running the numbers to see how many people you need to bring in, how much money to keep your rent around 10% of your gross revenue. That’s a really good rule of thumb. What some people do is they move into a bigger space and then they’ll sublet it out until they grow their own practice big enough that they fill up all the space. I’ve seen people do that. That might be a little more difficult nowadays with so many people working from home but I think the other thing you need to keep in mind too, is that with everything that’s happening with telehealth, you could set it up where your staff doesn’t necessarily work in the office 100% of the time.
They could work in the office 50% of the time and 50% of the time work at home, or they could work from home all the time. I’m building out a whole arm of my practice that’s all telehealth, so pandemic or not, they’re going to be working from home. So that’s the other thing to keep in mind; is that, yes, you may need to acquire some more office space, but you may not need as much as you used to. I had 10 offices and I gave up six of them. So obviously we have four left and about half my staff wants to work in the office half the time and work at home half the time and then the other half of my staff wants to do 100% telehealth. So I actually have about enough space for our office is going to be enough for 12 people to share because they’re not going to be all working full-time in the office.
So that’s the one thing I would really encourage you to think of through; is how is you were staff going to use the space and making sure that they’re all using the space as much as possible. So you could really be seeing clients anywhere from 8:00 AM to 8:00 PM. And so that might mean somebody comes in from 8:00 AM to 4:00 PM and then somebody else comes in at 4:30 and leaves at 8:30 or something like that. Like there’s no reason why you should just have one person to an office because one person’s only going to work 20 to 25 hours a week and you could have that office space filled up 50 to 60 hours a week. So if you haven’t totally filled the space that you currently have, I would probably focus on that. At the same time, if you think you’re going to outgrow that space, I think it is smart to look around and just see what what’s available.
Commercial realtors, especially can be very helpful with finding you places that might not be listed on the internet. Having those connections to get information that you may not be able to get just as a regular person calling up to ask questions or get information. They also can be really invaluable with negotiating leases. Leases are obviously over the length of time that they are, I mean, it’s not atypical for a lease to be five years long. And even if you’re just paying $2,000 a month, that’s $2,000 times 60, which is $120,000. So that’s a lot of money. if I was spending $120,000 on something, I would want somebody in my corner negotiating for me, making sure that I was getting what I needed and wanted and not, you know, signing my life away on something I didn’t quite understand.
So I would say definitely if you’re going to look for a new space, ask a commercial realtor to help you. I think as well, you might be able to really delay moving into a new space, obviously, depending on your particular circumstances. Because of the pandemic you may be able to push it to fall, or maybe even the beginning of 2022 before you really outgrow your space because so much is going to be telehealth, probably until the pandemic is over. So I wouldn’t be too quick to run out and get more space unless it’s something that you’re really sure you’re going to that space in the next six months. I would say really focus on fleshing out all of the space you currently have, and then also see if you can hire some people who want to do 100% telehealth.
You might be surprised it’s a big perk for a lot of people. They don’t have to commute and they get to wear comfy pants and so they might want to jump at the chance of working from home. So all that being said, I hope that was helpful and explaining the answer of, should I take on additional office space? As you can see, there’s a lot of factors to think through and I think we’re in a really good position now, like I said, if you do think you need office space to negotiate a really good deal for yourself. Okay. So we’re going to put that question to rest and we’re going to move on to the second question.
And I’m actually going to read this, the question that this person posted in the Facebook group. So our group practice boss member said, “I hear a lot you don’t want to grow too quickly,” which in essence I can understand in practicality, I am wondering how all of you would define or calibrate ‘too quickly.’ What are some things to keep in mind as a practice owner related to this, especially as the temptation might be to continue to grow as calls continue to come in? So I love this question because I get asked this all the time and I think what’s happening right now is most therapists are overwhelmed by the amount of calls that they’re getting, obviously ramped up by all the effects of the pandemic. I know as a practice owner, I had a similar reaction of, “Oh my gosh, we’re getting all these calls. Pretty soon we’re going to be full. I’m not going to be able to help all these clients. Should I keep hiring? Should I not? How many people do I need to hire and what span of time?” There’s like a lot of things that go into this.
So I wanted to answer this question first by saying that one of the biggest reasons why businesses fail is because they grow too fast. That means that your initial systems or processes that you set up cannot handle the volume that your business has increased to. So if you initially set up a system to handle 300 clients and all of a sudden you have a thousand clients, well, that’s a whole different thing. And if you haven’t been really keeping tabs on tracking your data, making sure things are running smoothly, making sure things aren’t falling through the cracks, and by falling through the cracks, I mean, like you’re not letting payments go uncollected or insurance billing is getting messed up or clinicians are getting sloppy with their notes and things aren’t getting completed on time or not getting completed at all. These problems can obviously become big problems. It’s like the snowball that rolled down the hill.
So you want to think about and start tracking all of these different data points to see if things are really running well. And if things are running well then great. Then I would say that is your sign that. Yes, if you continue to have new clients calling and you have more capacity to hire more therapists then wonderful. Just make sure you’re really keeping tabs on all of those pieces of information, again, so you can nip kind of small problems in the bud before they become big problems. But I think the one thing that a lot of practice owners don’t realize, and this is actually something I realized myself, is that there’s going to be a tipping point at which you grow to a size where you’re going to have to start to structure things differently. So for me, that was between like 15 and 20 therapists. That was really the point at which I needed to get a second full-time admin.
We had to change the way we did the billing. So the therapists always did the billing and now we’re actually hiring another staff to take over the billing. I had to hire a chief operations officer to really manage the day to day of the practice. We now have kind of managers who are over teams of therapists. So that is their direct supervisor and each team has about 12 therapists on it. So there was just a number of things that had to change because the volume got so big, and I don’t think I realized that until I was in the middle of it and then I was like, “Oh yes, this thing we used to do that worked really well when we had 300 clients. It worked fine. Well now we have 900 clients and it doesn’t work anymore.” So I think that’s the thing you also have to keep in mind.
And this is one of the great things about the Group Practice Boss community; is that you know, a lot of us are going through this for the first time and some people in the group have already been there, done that and can give you advice and give you lots of pointers from their own experience. And so there may not be again, a one size fits all cut and dried answer to what are all those things that you need to change once you grow to a certain size, but it’s just something to keep in mind, even just being aware of it and knowing that you’re going to reach that threshold and just kind of being nimble and ready to make those changes as you see things happening.
So I don’t think that you should necessarily stop growing just because you’re are afraid that you might be growing too quickly but you just really need to make sure that everything is running as smoothly as it can and there’s not kind of leaks, money leaks in your business or time leaks in your business, or maybe you want to look at your budget and determine how much does it actually cost to bring on a new therapist. And obviously you don’t want to overextend yourself in that way. Like if it costs a few thousand dollars to bring on a therapist do you have the money to bring on five or 10 at once? You may not. So you may not want to do that. You may want to stagger them over a period of time. So this is a really tricky balance. I know in the fall we were really getting a big volume of calls and I knew that we were going to get full really quickly with the staff that we had unless I hired more people.
So I brought on like five or six people in the fall, and it definitely felt like it got a little unwieldy and there were things that were falling through the cracks. And that was actually what motivated me to hire the COO because I don’t necessarily like managing all those details and I wanted somebody who is really going to have a handle on those things. I actually was thinking about having her come on to a podcast episode when she’s been in the practice a little bit longer and can talk about what she does on a day-to-day basis because I know a lot of people are interested in that. So that’s kind of my advice about growing too quickly and how do you kind of ride the wave of meeting the needs of the community while also not like overextending yourself from a business perspective.
So those are the two big questions that I wanted to answer on today’s podcast. If you are interested in Group Practice Boss, we decided we’re just going to let the doors open all the time. If you want to join and you are an established group practice owner, like you have at least yourself and two other clinicians hired, we would love to have you in our group. If you’re looking for ongoing support, being a group practice owner can be very isolating at times. There’s maybe other group practice owners in your local area, but they don’t necessarily want to talk to you and so it’s so cool to see people sharing ideas and supporting each other and asking these questions and you see other people like, “Oh yes, I was wondering about that too. How do you handle this? Can you share information about that?” And it’s just so neat to see people making progress in their business and scaling up and really feeling like they’re embracing being the boss. And we call everybody in the group of boss. So that’s fun too.
So if you’re interested in that you can find that practiceofthepractice.com/grouppracticeboss. And like I said, we have the membership open all year round. So anytime you’re ready to jump in you can go to that link.
I hope you are all doing well. I know here in Pennsylvania it seems like spring is upon us. And I am excited about being able to get outside and some things here returning to normal. My kids are going to play sports again and we’re going on vacation this summer. So things are definitely looking up after being at home most of the past year. So I hope you are also enjoying the new season that is upon us and thanks for listening once again.
Once again, thank you so much to Therapy Notes for sponsoring this show. It makes notes, billing, scheduling, and telehealth a whole lot easier. And if you’re coming from another EHR, they make the transition really easy. Therapy Notes will import your client’s demographic data free of charge during your trial so you can get going right away. Use the promo code [JOE] to get three months free to try out Therapy Notes.
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This podcast is designed to provide accurate and authoritative information in regards to the subject matter covered. This is given with the understanding that neither the host, Practice of the Practice, or the guests are providing legal, mental health, or other professional information. If you need a professional, you should find one.