Are you considering scaling your private practice? Maybe you're considering pivoting to a group practice or debating other ways to earn more revenue. Regardless of where you are in your career, it's typical for therapists to consider how and when they should grow their practices. That said, it's important to be aware of the risks and benefits and know which steps to take to ensure your success.
In this article, we'll dive into what you need to know and provide action-based tips for optimizing your scaling strategy. At Navix Health, we can support your professional growth at every stage- from first opening your practice to continually expanding your expertise and growing your client base.
What Does It Mean to Scale Your Private Practice?
Scaling your private practice refers to expanding beyond just a sole practice. There are many ways to scale your practice, but you might consider some of the following options:
Hiring additional clinicians: Some therapists shift from maintaining individual private practices into operating group practices. State laws vary on how to compensate and hire therapists. For instance, in some states, they can be classified as independent contractors, but in others, you need to classify them as W2 employees.
Opening different locations: Scaling can also refer to geographical growth. Your practice may have outgrown its current office space, and you may seek to serve other professionals or communities.
Offering different services or income streams: Instead of seeing clients just for therapy, you might also expand services to include other revenue streams, including offering supervision, consultation, teaching, speaking or other professional tasks.
Benefits of Scaling Your Practice
In any industry, scaling comes with numerous advantages. As a therapist, scaling may mean spending more time on tasks that you genuinely prefer. It might also lead to a greater work-life balance and more financial freedom.
Increased Income
Most private practice owners scale their businesses because they want to enhance their revenue potential. This becomes particularly incentivizing when you only work fee-for-service. For example, when you're sick or traveling, you don't get paid. Creating systems where you still earn money can dramatically impact your cash flow by:
- Having more billable hours: If you have other therapists working for you, your practice can take on more clients, resulting in more billable hours and more revenue.
- Offering specialized treatments and services: Expansion may encourage you to offer more expensive services (group therapy, consultation groups, intensives) that may attract more clients.
- Passive income streams: Your scaling strategy may include passive income streams, including making digital courses, online trainings, books, and more. Although these items require upfront time and money, there can be massive potential for earning more money over a sustained amount of time.
Access to More Clients
If your focus is on increasing accessibility, scaling offers you the ability to expand your reach in your community. When you have a bigger team, you have more resources, knowledge, and support to offer potential clients.
You may be able to access more clients via:
- Offering groups (group therapy, supervision groups, consultation groups)
- Accepting insurance and/or Medicare/Medical
- Engaging in community-based training or outreach
- Hosting on-site workshops
Business Stability
When you run your own practice, your income is directly proportional to the number of hours you see clients. This isn't inherently problematic, but it limits how much control you have over your time. Furthermore, it can be tricky if you want to travel, take parental leave, or have other forms of absences.
When the business can run without just you manning every task, you can enjoy more freedom and flexibility.
Opportunities for Mentorship or Leadership
Scaling may open opportunities to embody more of a leadership role, which can feel both rewarding and enriching for therapists. This may continue benefiting your practice by:
Improving your professional reputation: Scaling your practice can strengthen your public image and inherently boost your marketing efforts. This, in turn, can lead to even more growth opportunities in the future.
Strengthening your professional skills: Leadership forces you to grow and expand your knowledge. In addition to providing care for clients, leadership requires utilizing many other skills, including problem-solving, conflict resolution, attunement, assertiveness, and crisis intervention.
Manage or Prevent Burnout
Direct clinical work can become draining for even the most dedicated therapists. Scaling shifts you away from just one role (being a therapist) and allows you to engage in different skills and strategies.
Some people find they love managing the business side of operating a practice, and others discover new passions in training, mentoring, or supervising. All of this can keep you feeling rejuvenated and inspired.
Risks of Scaling Your Practice
Scaling your practice isn't always a straightforward process. Many therapists can attest to the growing pains and struggles associated with taking risks or expanding their services.
Increased Administrative Tasks
At first, you will likely be spending more time on your business than you ever have before. You might be juggling networking events, onboarding tasks, accounting work, and more. You might be doing this all while managing a high caseload. Staying focused can feel challenging, and it may bleed into your ability to still provide high-quality care to your current clients.
Higher Operational Costs and Risks
Growth usually means more upfront money. This is inherently risky, and the financial market can change at any given moment. In addition, there's generally a trial-and-error process associated with any expansion. Instead of doing things the way you've always done, you'll need to employ new tools and processes- some of which may not be lucrative.
Management Struggles
Hiring the wrong team member can drain your resources, money, and even your reputation. It's essential to be aware of this risk, particularly as you start delegating different work.
Moreover, some therapists realize that, even though they really enjoy their clinical work, they don't particularly enjoy managing other professionals. If you’re concerned about management, consider scaling slowly to see how it feels. You may even consider starting by just outsourcing a few tasks to a virtual assistant to gain a rhythm for delegation.
Tips for Growing Your Practice in a Sustainable Way
Having great ideas is one thing, but building a successful practice requires both time and effort. Here are some proactive strategies for scaling.
Establish Your Main Goals
To successfully scale your practice, you need to have a clear strategic process of why and how you intend to expand. What are your main priorities right now? Do you want to make more money? Grow your professional reputation? Offer more mental health services to more clients?
Having a main goal in mind keeps you organized and focused as you start planning your next steps. As you create a vision for how you intend to scale, consider which roadblocks you might encounter. How will you maintain a sense of regulation and optimism when things inevitably become challenging? Where will you seek support when you feel overwhelmed?
Audit Your Finances
There's no "right" time to expand your practice. However, you should have a strong understanding of your financial situation. Scaling requires upfront time and money- to make this growth a success, you need to truly understand the financial implications you're absorbing.
Plan for ongoing cash flow management:You want to ensure you have enough capital to sustain your practice during the growth phase. This doesn't mean avoiding debt altogether (that may be inevitable). But you want to make sure you know your numbers and can account for them as you bring on new staff or absorb more costs.
Assess your profit margins: Instead of simply looking at the gross income potential, you want to consider your profit margins. How much time, for instance, will it take to see a return on your initial investment? How much do you anticipate making per month or year compared to what you make now?
Speak to an accountant: A professional CPA can help you better navigate your cash flow, business structure, tax situations, and more. Although you can certainly DIY your accounting, most therapists find it's better to outsource some of these tedious and complex tasks to a professional.
Hire the Right Staff
Your staff can truly make or break your business, and the success of your scaling largely depends on the people you bring on. Most importantly, take your time. Don't rush to hire someone or build a team haphazardly.
While there's no perfect formula for hiring team members, most people find that it's beneficial to engage in a thoughtful interview process. Take time to really get to know the people you might be hiring and don’t overlook the merit of having a preliminary trial period with new hires.
Honor the Challenges of the Growth Phase
As a therapist, you already know that change is hard, even when that change is positive or desired. Anything can happen, and it's key to stay grounded as you move through the ups and downs of this transition.
The growth phase is full of various challenges, but it can also be so exciting and inspiring. Try to hold onto that beacon of hope- even during the hard moments.
How Navix Health Can Optimize Your Practice
At Navix Health, we value therapists spending time on what matters most to them. Whether that's meeting with your clients or supervisees, creating training manuals, hiring new clinicians, or conducting research, we take care of all the administrative tasks so you don't have to waste time.
We pride ourselves on staying diligent with the latest technological advancements, ensuring that your documentation and billing are as seamless as possible. Our dynamic management software is intuitive and can transform how you manage and grow your behavioral health practice.
Contact us today to schedule a custom demo and start a free trial.
