While success has different meanings for different people, for the purpose of this series we will use it as a way to measure how well you build, run and grow a profitable private practice specializing in Mental Health. It means not only being successful at what you do, which is providing mental health services, but also being successful at running the business itself. Below is a list of courses taught to MBA students preparing themselves to be successful business professionals at the Harvard Business School:
Finance, Marketing, Strategy, Leadership and Technology stand out as the main topics among the ones listed above. You don’t need a Harvard MBA degree to be successful as a therapist, but you do need to be knowledgeable in these topics to make your practice thrive. If you focus only on being a very good therapist and ignore the importance of the business aspects of your practice, you will probably have a hard time building a successful private practice.
In this article, we focus on the business of Psychology. How can you build a successful private practice while continuing to help patients with your extensive clinical expertise? Let us start by saying that it is not easy. Business management requires a high level of commitment and patience. But don’t push yourself too hard! Surround yourself with experienced therapists and field experts and when in need, ask for their help.
First, it is crucial to create an overall business strategy. Here is a typical list of things you should do to prepare yourself even before opening the doors of your private practice:
Set up the company organization including the ownership structure
There are three different types of company structure you can set up for your practice:
- Partnership or Sole proprietor structures are easy to set up since you can use your personal social security number to file taxes. However, it comes with unlimited liability. It also makes it more likely to mix up personal and business finances, creating an accounting nightmare.
- Limited Liability Companies structure is recommended for most private practices. It limits your liability and it supports partnerships, ‘S’ or ‘C’ structures which can be useful for tax purposes. The filing requirements with the Secretary of State are minimal. Besides, if you become successful and need to take the company public, you can easily convert to a C corp.
- Corporations structure also provides limited liability and supports shareholders and boards of directors. However, this structure is better suited for larger companies with diverse shareholding patterns. It demands a more formal corporate operation and structure, has more filing requirements and audit requirements including Annual Reports.
Define the operational structure with roles and responsibilities
- If you have partners, dividing the business tasks of the practice can be a good strategy to success. One of the partner can focus on Finance & Accounting, while the other one does Marketing and Operations, for example.
- If you do not have partners then you should allocate time on your calendar for these tasks and get some professional help to make sure you’re doing it right.
Prepare a short term and medium term budget
Often times we underestimate the amount of money we spend when launching a business. New business owners tend to invest in things that they usually won’t need for another year. Before investing in a piece of equipment or a service, make sure to ask yourself first: “Do I really need this now, or should I keep the money for some more pressing need?” You’ll realize that a lot of items can wait and that your limited resources should be saved or invested in more basic business management tools.
Prepare a product and service offering plan
Match up your core expertise and team resources with the demand for your services in the local market. As a new private practice owner, you will want to work with all types of cases. But you’ll quickly realize that every therapist has core areas of expertise they focus on. Some therapists have broader areas of expertise, but they usually acquired it through experience over a long period of time.
If you try to deliver services further away from your core expertise, the quality of your services will be impacted. This can potentially hurt your business image in the long run. Instead, try to remain focused. For example, if you work well with children then advertise the fact that you specialize in working with children.
Prepare a matching marketing plan
Once you know the details of the services you are going to offer, start putting together a marketing plan. We absolutely recommend hiring a marketing professional that can take your ideas and create the branding and messaging that goes with it. WHen you have your branding and messaging, build your website, social media pages and advertising strategy with a well coordinated execution plan. Don’t forget to get matching logo and business card artwork.
Prepare a product and service delivery plan
The marketing implementation will help you get attention from your local market, and patients will soon reach out to make an appointment. However, before letting your first patients in, you need to make sure you have everything you need to deliver your products and services to them. Get all your systems and tools in place for Assessments, Treatment plans, progress notes, credit card processing, billing, etc.
Select the tools and technology systems for operations, billing, reporting and management
In order to know what product you’ll need to assist you, you must think about the workflow of your private practice. Take your first hypothetical client through the entire process from first contact to successful discharge after treatment. Look for a product that will seamlessly combine with this workflow. It must take care of every task and record storage and billing without forcing you to change your workflow to match the system.
Select the vendors for outsourcing specific tasks outside your area of expertise
You will need a lawyer to form your company, an accountant to set up your books and a marketing expert to create your logo, website and marketing materials. You must also select a bank for your business checking account and a merchant account provider to process your credit card transactions. You should work with a realtor to help you find a good location for the office and negotiate good terms.
If you are not already credentialed with Insurance panels, we recommend to get a company to help with credentialing so that you can accept insurance. Finally, you will need to work with a billing expert to help you submit or track all your claims. Alternatively, you can select a practice management software company that includes Insurance billing.
Start marketing activities early so you can open your doors with a partially loaded calendar
Gone are the days of the Yellow Pages as we knew it. Welcome to the world of Social Media and digital marketing. Start promoting your business online and on social media before you open doors.
You should also immediately join the local Counseling Associations and start networking with Medical practices in the area. They can be an excellent source of referrals. Physicians need a counselor to work with when their patients have mental health issues. Make a list of Family practitioners in the area and host a lunch for the doctors introducing your services.
The best aspect of establishing a good group of referral sources is that they will continue to send you clients with almost no ongoing advertising cost. Advertising driven marketing, on the other hand, will stop being productive almost immediately after you stop advertising.
With proper planning and execution you can make your private practice successful from day one. We believe that success in private practice can be engineered. What cannot be engineered is how good a therapist you are to your patient. That is up to you. In the next article we’ll focus on marketing a mental health practice using the most efficient marketing tools currently available.
Stay tuned for details of our Therasoft Jumpstart program. We will select a small group of individuals that want to start a private practice and provide them with all the support they need to make them successful from the day they open their practice. The winners will get all our services free for six months after the opening of their practice. To learn more, visit our social pages on Facebook, LinkedIn or Twitter, or send us an email at sales@therasoftonline.com.
