Whitney Owens and Alison Pidgeon Answer Your Most Pressing Questions about Group Practice | GP 26

Whitney Owens and Alison Pidgeon Answer Your Most Pressing Questions about Group Practice | GP 26

What are some suggestions for starting and running your group practice? How should you go about managing your group practice’s finances? Are there adjustments that you can make to run your practice both in-office and online?

In this podcast episode, Alison Pidgeon shares a Q&A podcast she did with Whitney Owens, where they answer some questions about group practice.

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Green Oak Accounting

Tired of never quite feeling comfortable with your practice financials? I’d like you to meet GreenOak Accounting. Their goal is to empower private practice owners with the financial information they need to make good business decisions. They specialize in working with solo and group private practices in the mental health industry, so they are uniquely positioned to help with figuring out what’s “normal” in your business finances and what’s not. So if you’ve ever had a conversation with your accountant or bookkeeper that left you wishing that they understood private practice or had some best practices to share, head over to www.greenoakaccounting.com and schedule a free consultation to see if they might be a good fit for you. They can help with all your accounting needs from bookkeeping to payroll to Profit First and budgeting & forecasting.

Meet Whitney Owens

Whitney OwensWhitney 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. Whitney has spoken at the Licensed Professional Counselors Association of Georgia’s annual convention and at Killin’ It Camp. Whitney is a wife and mother of two beautiful girls.

This entrepreneur went from a private practice owner to being a consultant. Providing fellow clinicians the tools they need to run a successful practice.

Visit Whitney’s website, connect with her on Facebook, listen to her podcast, or consult with Whitney. Email Whitney at whitney@practiceofthepractice.com

In This Podcast

Summary

  • Putting a down payment on an office building
  • What banks look for in loan candidates
  • Having multiple professions in your practice
  • The most common mistakes made by group practice owners
  • Hiring associate-level clinicians for your practice
  • Tips for obtaining certifications for women and minority business owners
  • Adjusting to having a hybrid office
  • Typical revenue for expenses
  • Rule of thumb for marketing expenditure
  • Ensuring you have the necessary HR policies in place
  • Systems and strategies for managing a busy practice

Putting a down payment on an office building

When buying an office building, you’re going to need to do some research about the options you have regarding the percentage you’d need to spend as a down payment. From my experience in 2018, this percentage ranges from 15% to as much as 30% or 40%, so make sure to “shop around” and talk to a few banks before settling with one that causes you to lose out on a lot of money.

What banks look for in loan candidates

Some tips for being a desirable candidate for the commercial loan:

  • Experience and stability – It helps to know that you’ve been in business for a while and that things have become stable enough for you to be buying a property. Take along two or three years of tax returns when you meet with the bank.
  • Sufficient information about current rent – When I bought the building for her practice, the bank used the amount that she was paying in rent as a starting point to establish what she would pay in mortgage payments, so take along some recent financial statements and be prepared to have that discussion.

Having multiple professions in your practice

Neither Whitney nor I are 100% sure about the legal details when it comes to hiring people of multiple professions in your practice, such as psychiatrists, massage therapists, and nutritional therapists all under one roof. However, I have done consulting with people who have done this, such as people who run wellness centers, so it’s not necessarily a clear-cut yes or no when it comes to having multiple professions in your practice.

I have heard some different things, but mainly this is based on state laws, so do some research in your own state and make sure what is and isn’t allowed there in terms of multiple different mental health licenses being issued to the same practice. Ultimately, it is best to consult your legal advisor or attorney before hiring anyone from a different profession into your practice, so as to avoid any legal repercussions.

The most common mistakes made by group practice owners

  • When people start their group practice before getting advice from people with experience, they often end up paying their staff way too much without putting enough aside for themselves or their overhead. They then end up having to work a lot of extra hours to be able to pay themselves a decent salary and to cover all the other expenses.
  • In the early stages of running the practice, people think that they have to spend lots of money on marketing, a lot of which is spent on campaigns or methods that do not work and are essentially a waste of time and money. Instead, try to figure out what types of marketing work best for you and your practice, and spend your marketing budget on those things.

Hiring associate-level clinicians for your practice

I like hiring associate-level clinicians, who are students who have already got their master’s degrees but still need to work the required amount of clinical hours before getting their licenses. These associate-level clinicians are sometimes referred to as interns in the same way as some medical students while completing their residency.

At my practice, I hire someone to supervise the associate-level clinicians, and both of us sign off on the associate level clinicians’ hours for them to take to the licensing board. This is also financially feasible because you typically pay interns and associate-level clinicians much less than you would a fully licensed clinician, so I am able to offer clinical services at much lower rates than I would if all of the staff in my practice were fully licensed clinicians.

I often recommend to my consulting clients that, when it comes to hiring, they need to do whatever makes more sense financially for the practice and for them as the practice owner. So, if you’re hiring interns that need to be constantly supervised and you end up not seeing many clients yourself, make sure that your numbers add up and you aren’t making big financial mistakes.

Tips for obtaining certifications for women and minority business owners

So, B Corp status basically means that you’re agreeing to operate your business in a very ethical way, that you’re paying your staff a living wage, that you’re thinking about, you know, utilizing other services/vendors in your business that are maybe minority-owned or women-owned, you are thinking about the environment and being as environmentally friendly as possible…

This varies from state to state but there might be a special designation for women-owned businesses. In Pennsylvania, for example, there is an application process that you can go through to be designated a truly 100% women-owned business and get special advantages, such as tax breaks. Similarly, you could be certified as a B Corporation.

Adjusting to having a hybrid office

Since COVID-19 has forced many businesses to move online, either partially or fully, it is important to think about adjustments that can and should be made when considering turning your physical practice into a hybrid online/in-office practice. One adjustment I have made so far is to have half of the therapists working in the office and half of them working from home providing telehealth therapy.

When a client calls to schedule an appointment, the practice elaborates on the risks associated with physical appointments and the benefits of telehealth, allowing the client to make an informed decision about what would be best for them. Even after this pandemic, it could be good to continue providing telehealth services from your practice as well as in-office consultations.

I suggest having a sort of “hybrid schedule”, so some therapists could work in the office part of the time and from home the rest of the time. Another idea is to hire therapists who work 100% remotely to work via telehealth, as this would allow you to expand your practice while saving on additional rent and could also diversify the scope of therapy available to your clients.

Typical revenue for expenses

Green Oak Accounting provides a chart of the ranges of what you could expect to spend in the different areas of running your group practice. Break it down as follows:

  • Therapists salaries = 45-50% of your budget
  • Administration (VA, office manager, receptionist, etc.) = 5-10% of your budget
  • Overhead (rent, payment transaction fees, coffee for the office, marketing, etc.) = 15-25% of your budget
  • Profit and owner’s pay = 15-35% (i.e. the rest of your budget)

My accountant ran the numbers for me and worked out those ranges specific to my business, so you should try to ask yours to do the same. That way, you can figure out which areas need a bit more of the budget, which are getting too much, and how to get a decent profit at the end of the day. This kind of breakdown is important for you to have so you can estimate how much it is per hour for your therapists to provide therapy, which is important information to share with insurance companies if you are an insurance-based practice rather than self-pay.

Rule of thumb for marketing expenditure

In my experience with my group practice, they were spending more money on marketing during the first two years than they are now. This makes sense because they were trying to put the word out there and get more clients, until about the two-year mark where word-of-mouth becomes a prominent form of marketing and you can trust that some of your existing clients will have recommended your practice or a specific therapist to their friends and family.

Now, since the practice is relatively well-established in the community and word-of-mouth referrals are more prevalent, the marketing does not have to be on such a large scale anymore and does not require as much from your budget. Whitney also noticed that sort of shift at the two-year mark, because word-of-mouth was bringing in about the same amount of referrals as the more ‘active’ marketing such as via Google ads.

Ensuring you have the necessary HR policies in place

When hiring employees, you need to have at least some sort of game plan when it comes to HR, be that through an official HR company, hiring someone dedicated to handling your HR, or finding a suitable attorney to help you manage it yourself. Ultimately, the choice you make on how to manage the HR protocol when hiring someone can depend on the cost point.

I took an employment attorney on board to help with following the necessary HR protocols, such as creating an offer letter that you send to the prospective employee in the place of a contract, which most people think that you have to draw up. I also set up a training handbook for which the attorney gave the green light from an HR standpoint. More recently, my assistant became the office manager and now also handles a lot of the HR, which includes calling the appropriate attorney for legal clarification where necessary.

An important thing to do is to establish what you are able to spend in terms of handling HR. Lawyers tend to charge a lot per hour, so an HR company may be more affordable within your practice’s budget. I have recently started working with a national HR company called Bambee HR, based out of California, who have representatives that you can work with and software that you can use on your side to keep track of personal files and data.

Systems and strategies for managing a busy practice

Learn to delegate and hire an assistant

Figure out what tasks or roles are integral for you to perform and which are not, then hire someone to handle those other tasks. One of the mistakes that Whitney sees business owners make is waiting too long to hire an assistant, to the point where you end up neglecting the work that you, specifically, are supposed to do. For example, you as a therapist need to prioritize seeing clients over answering the phone and managing the office admin, so it’s a good idea to hire someone who will dedicate themselves to those other tasks and allow you to actually do therapy work.

Get someone to handle all your marketing for you

It is important to have one person or a team that is dedicated to managing all the marketing, such as your social media profiles. In this way, you don’t have to worry about it on top of the other things that come with being a practice owner.

Books mentioned in this episode

Useful Links:

Meet Alison Pidgeon

Alison Pidgeon | Grow A Group Practice PodcastAlison 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 and has helped over 70 therapist entrepreneurs start and grow their businesses, through mastermind groups and individual consulting.

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