Should I Start Another Business for Consulting, What About Liability, and Extra Trainings PLUS more Q&A | PoP 392

Should I Start Another Business for Consulting, What About Liability, and Extra Trainings PLUS more Q&A | PoP 392

Wondering whether you should work on building your own private practice and branding under your own name? Do you need to start a separate business from your counseling business? How should you deal with no-shows?

In this solo podcast episode, Joe Sanok answers some of your questions.

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In This Podcast

Summary

In this solo podcast episode, Joe Sanok answers some of your questions about business consulting, liability insurance and no-shows.

Question 1

I opened up my own practice and I’m leasing my office in an established practice. I’m currently not taking insurance, but it’s something I have been open to due to what parents are willing to pay in my area. The owner of the other practice approached me and asked me if I wanted to come on board under a contract under him, I would be paneled under him, and it would be an 80/20 split. I’m already paying him X number of dollars per month for my office and would like to have that remain intact. I know I can start billing under him for Blue Cross Blue Shield clients right away and that was appealing to me. However, I’m not sure that it’s the right decision, because I will have to essentially redo the paneling process after our contract is up. And I want to move everything to my practice. Essentially, I would be operating under to the health record systems and providing clients who think they’re coming to my practice for counseling with intake forms, but I’m billing under another. Does this make sense to do and to get involved in? Or should I just be patient and work on building my own private practice and branding under my name.

Answer 1

Here are my thoughts, unless you can’t get paneled, I don’t see a reason to take the deal. Let’s look at the numbers: 10 clients per week at $90 per session is $180 per week for him and $720 for you. So, if you do it, the costs would be paneling, one-time cost of your time, or paying someone like Practice Solutions to help. Second, even ongoing cost of Therapy Notes as electronic health records. So that’s $49 per month and 10 clients per week, that would be a cost of about $1.23 per session. The ongoing cost of billing, I would say don’t do it yourself, hire someone like Practice Solutions, you can go over to www.practicesol.com/billing or www.practiceofthepractice.com/fun, they charge 6% – at that time, it was 5% so I said that would be about $4.50 per client, and you only pay if you get paid.

  • Totals of doing it this way from that $90 per session is $5.73 for your EHR and your biller.
  • Which means that you get at $4.27 per session times 10 Sessions is $842.70 for you per week.
  • And that’s 93.63% and $57.30 cents, which is 6.367% for the electronic health records and the biller.
  • The annual difference, if you work 48 weeks a year with the 80/20 split, that would mean that you would get $34,560 and pay him $8,640 versus you getting $40,449.60, and paying the EHR and the biller $2,750.40.

Question 2

Do I need to start a separate business from my counseling business? I’m also wondering about liability insurance and specialized training in providing consulting to new counselors.

Answer 2

If you think that you want to, at some point sell the practice, it’s in your interest, about three years ahead of time to make sure that they are two separate, distinct entities, it’s going to make everything easier, it’s going to make the actual amount of money coming in and the expenses, crystal clear.

With my liability insurance, they have an option for consulting to have as an add on. It’s like $20 – $50 a year for consulting, teaching and working outside of your traditional counseling. I think that’s important to look at with your current liability insurance. What does that cover for you?

You really want to have two distinct websites, two distinct brands, different colors, don’t have them be interchangeable, even if they’re all under the same LLC or PLLC. Think through who you are trying to target through the consulting and what their needs are, and make sure you have a website that is distinct to them.

Question 3

My question is regarding a late cancellation fee or no-show fee. I know it’s important to set boundaries and my time is valuable and part of it is me believing that and really upholding that boundary, but what is your late show fee, do you automatically hold the card on file and charge that or do you discuss that with them in the next session? How many late no shows do you allow, do you allow two and then you just totally discharge them and don’t give them another chance? How long do you work with a parent, with their teenager in therapy? I don’t want to get too sucked into the cycle. I was thinking a $60 fee, but do you ever not charge that if someone has a baby or like their parent dies? When do you do that?

Answer 3

My no show or late cancellation fee is the same as my counseling fee. I think that sets the precedent that my time is worth that amount.

The way I do it is if it’s someone’s first session, their intake and they no-show, that’s the most common time for someone to no-show and you’re not going to really start the relationship very well if you charge them double for an intake, so I would just not worry about that at all.

Now with established clients, I make sure that in the paperwork it stipulates that they will be charged the full amount if they no-show or late cancel. If I am seeing a client and they no-show, I would send them an email saying ‘you, or your son, no-showed today, just a reminder that you’re charged the full fee for that session. Because of that, please let me know if you want to pay ahead of time or if you would like to pay in the next session.’ Say they come to the next session and then they say ‘I’m not going to pay for that’ or they, they no-know show again, I then would not reschedule until payment is made in full before I scheduled the next session.

I don’t discharge people because I feel like if someone’s going to pay for it, and not learn from that they probably need a counselor.

Now, when do I have to make exceptions? If a kid is sick, or this person’s been consistently there, if they’re sick, I don’t want to get sick. If they have a family emergency pop up, to me it’s more what’s the history? Do they have a chronic history of no-shows? Well, then I’m probably not going to trust that they keep having these emergencies happen and they’re not putting boundaries around their counseling. If someone’s family member dies, if someone’s sick in the hospital, if something unexpected happens, and these people have been consistent, I’m going to waive that first one. And then after that, I’ll probably charge them unless it’s a major emergency. Things happen to people and you know, you don’t want to be that person that’s just always charging them every single time

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Podcast Transcription

[JOE SANOK] There are so many ways to keep your practice organized. But Therapy Notes is the best. Their easy to use, secure platform lets you not only do your billing, scheduling and progress notes, but also create a client portal to share documents and request signatures. Plus, they offer amazing unlimited phone support. So, when you have a question, you can get help fast. To get started with practice management software trusted by over 35,000 professionals, go to www.therapynotes.com and start a free trial today. Enter promo code ‘Joe’ and you’ll get two months for free. Again, that’s promo code ‘Joe’ at www.therapynotes.com.

This is The Practice of the Practice podcast with Joe Sanok, session number 392.

Well, I’m Joe Sanok your host, I hope you are doing amazing today. If you are new to Practice of the Practice, welcome, I’m really glad you’re here. And if you’re old to us if, you’ve been around awhile, hey, thanks for sticking around. I know there are a lot of podcasts talking about private practice and big ideas and business and marketing and all the things that we cover, a lifestyle… I should throw that in there too because I’m all about making sure you have a good life as well. So, thanks so much for being here. Thanks so much for taking the time out whether you’re running or doing the dishes or driving or just sitting staring out the window. I know that your time is valuable, really excited that you’re here.

So today I’m doing some Q&A and a mixture between some folks that left me a voicemail and then also ones that emailed me and I have their permission to read their emails. If there’s an email question that you have just put in the subject line, just put ‘for the podcast question’ or ‘you can use this on the podcast’, something like that. I would love to do more of these listener questions, you can always leave a voicemail over at www.practiceofthepractice.com, I think it’s a minute or two to leave your question, and then I’ll potentially use it here on the podcast. We do some of these Q&A ones when we get a handful of them or when I remember it. We’ve had these sitting around for a bit, unfortunately, but I’m going do it a little bit more. Make sure that you leave a voicemail or drop me an email.

So, this person emailed me and she says: ‘Hi, I’ve been following you for some time now and respect and value your opinions. I’m truly stuck on something that has not necessarily been addressed by you and I don’t know what to do. I opened up my own practice and I’m leasing my office in an established practice. I’m currently not taking insurance, but it’s something I have been open to due to what parents are willing to pay in my area. The owner of the other practice approached me and asked me if I wanted to come on board under a contract under him, I would be paneled under him, and it would be an 80/20 split. I’m already paying him X number of dollars per month for my office and would like to have that remain intact. I know I can start billing under him for Blue Cross Blue Shield clients right away and that was appealing to me. However, I’m not sure that it’s the right decision, because I will have to essentially redo the paneling process after our contract is up. And I want to move everything to my practice. Essentially, I would be operating under to the health record systems and providing clients who think they’re coming to my practice for counseling with intake forms, but I’m billing under another. Does this make sense to do and to get involved in? Or should I just be patient and work on building my own private practice and branding under my name. Thank you so much for your input and guidance you give me. I signed the contracts on Friday, I’m thinking I want to retract it. But I’d like your input?’

First off, you always want to think through something before you sign a contract. And I actually sent an email to this person when they first emailed me. So, we’ve been kind of going back and forth anyway. But I think there are lots of parts to this, when should you work with other people to grow your practice versus when should you do it yourself. If you know that within a couple of months, you want to be taking insurance under your own name, you don’t want other people in the community to say ‘Wow, she really just used me for her gains.’ Whereas, if you are really able to use that to grow your practice, and you’re open and transparent with that person, you can totally do that. So, for me that might look like when you first start out – I was subleasing under another clinician, you might have referrals. You want to make sure though for that person that that doesn’t come across as a referral split or anything like that, because our code of ethics, at least for counselors are pretty clear about that. You have to make sure an attorney weighs in as well.

Let me read back my email that I sent this person, and then I’m going to go a little bit deeper: ‘But what a great question. Is it possible for me to read this on the pilot? Here are my thoughts, unless you can’t get paneled, I don’t see a reason to take the deal. Let’s look at the numbers. 10 clients per week at $90 per session is $180 per week for him and $720 for you. So, if you do it, the costs would be paneling, one-time cost of your time, or paying someone like Practice Solutions to help. Second, even ongoing cost of Therapy Notes as an electronic health records. Use promo code ‘Joe’ to get two months free. Disclosure, they’re a sponsor, but they’re awesome. So that’s $49 per month and 10 clients per week, that would be a cost of about $1.23 per session. The ongoing cost of billing, I would say don’t do it yourself, hire someone like Practice Solutions, you can go over to www.practicesol.com/billing or www.practiceofthepractice.com/fun, they charge 6% – at that time, it was 5% so I said that would be about $4.50 cents per client, and you only pay if you get paid. Totals of doing it this way from that $90 per session is $5.73 for your EHR and your biller. Which means that you get at $4.27 per session times 10 Sessions is $842.70 for you per week. And that’s 93.63% and $57.30 cents, which is 6.367% for the electronic health records and the biller. The annual difference, if you work 48 weeks a year with the 80/20 split, that would mean that you would get $34,560 and pay him $8,640 versus you getting $40,449.60, and paying the EHR and the biller $2,750.40. And then I said this email just saved you $5,889.60, smiley face.’

In a situation like this, you want to ask yourself, what would it take for me to get to the level that I’m getting the clients that I want? Is it that 20%, because there are so many other ways. Whether it’s joining Next Level Practice, whether it’s connecting with more people, paying somebody to get you on more panels, there’s usually a lot of different ways to do it. And if you feel like this really is the only way right now to be on their panel. It might be because of your state license or things like that, just make sure you do it ethically. But you want to make sure you’re running those numbers to really understand the benefit that you’re getting for paying 20%. If you were paying 20% for anything, whether it’s a credit card, or if you are getting paid 20% for an investment, that’s insane. 20% is a lot of money to give up for something that’s not super tangible like rent. It makes sense to pay 20% for your rent, for your actual building, but something like this, you want to make sure you really understand as the business owner, what you’re paying for and how that’s helping you. Alright, so let’s go to another question. This is a voicemail.

[BRIANNA WILLIE] Hi, Joe, this is Brianna Willie. I am wondering, do I need to start a separate business from my counseling business? I’m also wondering about liability insurance and specialized training in providing consulting to new counselors. Thank you so much and thank you for everything you provide.

[JOE SANOK] Brianna, actually, I’m going to answer this differently than I would have answered it six months ago. As many of you know, I sold Mental Wellness Counseling in June of 2019. I didn’t even know I wanted to do that until I decided I was in that last year of the lease and thinking about where Practice of the Practice was headed. And so, my accountant and my attorney had both advised me that under Michigan law and with all the ways things are structured that I could just do a DBA for Practice of the Practice and a DBA for Mental Wellness and that it would all be under my PLLC. In Michigan, we have professional limited liability companies. My professional company is Sanok Counselling PLLC.

There are a couple of things that you want to look at and you want to make sure that consulting, that’s okay if you have a PLLC to have that underneath. You would want to have that, and there’ll be a few other components that I’m going to go into. But in the past, I would have said to do exactly what I did, that totally makes sense to have them all under one. Now in going through the process… And I’m going to do a much more extended series on how to sell your practice because I want to talk about my perspective. I want to interview Nicole, the new owner of Mental Wellness, want to talk through all the different aspects of selling a practice and some of the things I learned and some of the things that I would do the same and that I would do differently. But one thing that made it harder, was that because Mental Wellness Counseling was within Practice of the Practice and all the finances were somewhat co-mingled. We knew exactly how much was coming through each channel, and we separated that out.

For example, we always used square for all of our counseling credit cards, and we use PayPal for all of the Practice of the Practice, we separated that out. If you think that you want to, at some point sell the practice, it’s in your interest about three years ahead of time to make sure that they are two separate, distinct entities, it’s going to make everything easier, it’s going to make the actual amount of money coming in and the expenses, all that is going to be crystal clear. Whereas for me, I had to go through and just kind of itemize everything, which was a huge pain in the butt. I was selling the practice so I was super happy to do it, but it was also still a bit of a gamble because Nicole was getting financing, it was backed by a small business association loan. In going through all of this paperwork, the whole time, it was like ‘I don’t know if this deal is going to go through, I don’t know’. Whereas if you had it really clean and clear, it’s going to make it a lot easier. So that’s the back-end side of things of why you would want to consider having two separate business entities.

In regards to liability insurance, if it is all under one business… I have my liability insurance, they have an option for consulting to have as an add on. It’s like 20 to 50 bucks a year for consulting, teaching and working outside of your traditional counseling. I think that’s important to look at with your current liability insurance. What does that cover for you? In all this, I’m not an attorney, I’m just speaking from my own experience, my attorney makes me say that I’m not an attorney.

A couple of other things that you want to look at, it’s important to as to how this comes across to the general public. You really want to have two distinct websites, two distinct brands, different colors, don’t have them be interchangeable, even if they’re all under the same LLC or PLLC. Because think about the person that comes to your counseling practice website. They are not looking for consulting, they’re not looking for life coaching, they’re not looking for a public speaker. Those are all things that you should have on a separate and distinct website. The target market or business avatar you have for your counseling practice should be a counseling client. Whereas your consulting people, well, they’re very different than counseling. So it’s going to be really hard to separate that out. Imagine if you went to www.mentalwellnesscounseling.com and that’s where I had all of my consulting work about how to grow a practice and how to level up and all that, my counseling clients or potential counseling clients in the past, they would have been like ‘what I’m on a business coaching page, this is weird, this isn’t counseling’. They would leave. And if you were there trying to start to grow and scale your practice and you saw all this stuff about depression, and we help angry kids, you’d be like ‘wait, I’m on a counseling website and not on a consulting website’. So really, I want to encourage you to think through who you are trying to target through the consulting and what their needs are and make sure you have a website that is distinct to them. Hopefully, that helps. And if any of you have follow up questions, by all means, drop me an email at joe@practiceofthepractice.com, tag me on social media. Just let me know how I can help more. Alright, let’s listen to another voicemail.

[KATIE SISKIND] Hey, this is Katie Ziskind, from Wisdom Within Counselling. I’m in Niantic, Connecticut, so like a beachy town. I have a question, you can totally use this, you’re welcome to use my name. I have a private practice, I see middle schoolers, high schoolers, I do a lot with like art yoga and music therapy. I consider myself an experiential therapist. My question is regarding a late cancellation fee or no-show fee. I know it’s important to set boundaries and my time is valuable and part of it is me believing that and really upholding that boundary, but what is your late show fee, do you automatically hold the card on file and charge that or do you discuss that with them in the next session? How many late no shows do you allow, do you allow two and then you’re just totally discharged them and don’t give them another chance? How long do you work with a parent, with their teenager in therapy? I don’t want to get too sucked into the cycle. I was thinking a $60 fee, but do you ever not charge that if someone has a baby or like their parent dies? When do you do that?

[JOE SANOK] Katie, this is such an excellent question. And one that we discuss quite frequently in Next Level Practice. In that membership community, it’s one of the most common questions that we get. Let me walk through some situations I’ve been in. My no show or late cancellation fee is the same as my counseling fee. I think that sets the precedent that my time is worth that amount, whether or not you come and so when you have a lower fee, it kind of says ‘Well, I couldn’t fill it anyway, I guess I might as well get something’ versus if you’re charging $150 per session’, and you say if you no-show, then I could have filled that time with someone else. Whether or not you could have filled it, that person didn’t give you the respect to be able to try to fill it. So, I first start with recommending that you charge your full fee for a no-show or late cancel. Now if it’s at the 23-hour mark or the 24-hour mark, I’ll talk about when I have wiggle room in a second. The way I do it is if it’s someone’s first session, their intake and they no-show, that’s the most common time for someone to no-show and you’re not going to really start the relationship very well if you charge them double for an intake, so I would just not worry about that at all.

Now established clients, I make sure that in the paperwork, it says it, I make sure that in the intake email, it says it and that they’re signing off on it, that they will be charged the full amount if they no-show or late cancel. If I am seeing a client and they no-show, I would send them an email saying ‘you, or your son, no-showed today, just a reminder that you’re charged the full fee for that session. Because of that, please let me know if you want to pay ahead of time or if you would like to pay in the next session.’ Say they come to the next session and then they say ‘I’m not going to pay for that’ or they, they no-know show again, I then would not reschedule until payment is made in full before I scheduled the next session. I don’t want someone to be more than two sessions in debt to me.

Let’s say they came with a check, and their check was just for that session and they didn’t have any other way to pay for the no-show that they had on their account, I would say ‘we’re not going to be able to reschedule your next session until that’s paid in full. If you want to schedule it, we can schedule it. But if it’s not paid prior to that session, then we’re going to need to cancel it.’ They may schedule for next Wednesday but if I don’t receive a check in the mail, you can always use PayPal. With Practice of the Practice, we have www.practiceofthepractice.com/payment and it just goes to a landing page where someone can send us any amount of money that they need to send us and put a note in there as to what it’s for. Having something like that for your counseling practice is really important to have so they can pay digitally or send an invoice through QuickBooks. There are lots of ways that you can get paid virtually.
I had a situation where a boy had no-showed twice. I said to the mom ‘You know, you need to sign a check’ and she for some reason didn’t like mailing things, she didn’t like using the internet much. So, she came to my office and slipped it under the door and then I actually got to the point where I had them pre-pay at least one session that had because it was such an issue. And they paid for more no-shows than they ended up paying for actual counseling. I don’t discharge people because I feel like if someone’s going to pay for it, and not learn from that they probably need a counselor. And not that I want to just get paid for standing around and blogging but if someone’s going to pay for it, and they’re not going to fully commit to it, then that’s their choice.

Now, there is a certain point when if they’re in counseling, and they’ve not shown up for months and months I might discharge them at that point. So, I think it’s really important to make sure people don’t get behind on payments, and they make sure that they pay before they can schedule again. I had someone that two hours before our session once wanted to cancel, so I said ‘That’s fine, but your rate is 175 per session. So, we can either add that to your next session, or you can send it to me via PayPal.’ While they showed up for their session, they made it work, they realized that paying $175 to not be in counseling was a big deal. People will make it work more times than not.
Now, when do I have to make exceptions? If a kid is sick, or this person’s been consistently there, if they’re sick, I don’t want to get sick. If they have a family emergency pop up, to me it’s more what’s the history? Do they have a chronic history of no-shows? Well, then I’m probably not going to trust that they keep having these emergencies happen and they’re not putting boundaries around their counseling. If someone’s family member dies, if someone’s sick in the hospital, if something unexpected happens, and these people have been consistent, I’m going to waive that first one. And then after that, I’ll probably charge them unless it’s a major emergency. Things happen to people and you know, you don’t want to be that person that’s just always charging them every single time. But that’s where you want to use your own discretion. Hopefully, that helps.

We have tons more resources over at www.practiceofthepractice.com/resources, head on over there. We’ve got over 30 checklists, e-books, different ways that we can help you start to grow and scale your practice. Also, Therapy Notes is the best electronic health records out there, head on over to www.therapynotes.com, use promo code ‘Joe’ to get two months for free. And it’s going to help you grow your practice so much faster, streamline and have those systems in so that you can focus on the stuff that you’re really good. Thanks for letting me into your ears and into your brain have an amazing day.

This podcast is designed to provide accurate authoritative information in regard to the subject matter covered. It’s given with the understanding that neither the hosts, the publisher or the guests are entering legal, accounting, clinical or other professional information. If you need a professional you should find one. Thanks to the band Silence Is Sexy for your intro music. We love it.

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