Starting a private practice is hard work. Of course, there are a lot of things that go into building and growing a private practice as a therapist. In large part, it takes a lot of cultivating and diversifying of referral sources. More than that, it also requires knowing your business landscape and tracking your progress. Unfortunately, while most of your training, education, and clinical hours prepared you for the work of being a therapist, it is unlikely they set you up to be a business owner. For most therapists, they end up having to think like entrepreneurs and learning by trial and error. A good way to avoid the “error” side of trial and error is to partner with a therapy matching service to generate new clients.
When you are first starting a private practice, it’s likely that you don’t have much money to invest back into the practice, and are looking for low cost and free ways to promote your business. With student loans, a low starting income, and a lack of resources, it can be difficult to get your private therapy practice off the ground. Even with a decent understanding of business, keeping the wheels turning can be a challenge for many mental health professionals.
Let’s dig into some practical ways to grow your private therapy practice and uncover how to be a successful therapist.
There are three major arteries when it comes to growing your private therapy practice’s revenue: increase the number of clients, average transaction, and the number of times clients return. All three things need your attention, but just a slight increase in any of them can lead to dramatic results.
Focusing on getting new clients is critical. But, it's also important to know what the average new client is worth to your private therapy practice in terms of how much they spend on a session, how many sessions they use per year, and how many years they’ll need treatment. If an average client spends $100 on each session and sees you once a week for a year, that new client is worth $5,200 in revenue, which doesn’t include potential referrals and additional sessions. Instead of focusing on the number of clients, think about what that means in terms of income.
Secondly, considering increasing your fees by 10 percent can help you see a significant increase in annual revenue. Know the value of the services you provide. How are you presenting that value? Are you getting paid what you’re worth? Do you raise your hourly rate each year? At least enough to keep up with inflation? If not, why not? Ask yourself these questions with an open mind and realign on fees.
Thirdly, it’s not best practice to try and encourage patients to sign up for more sessions than they need, so you need to get more creative about additional revenue streams in thinking about how to increase client return. Consider personalized coaching, providing online and offline workshops for specific topics, group therapy, consulting to other therapists, publishing books and articles, and even creating online video courses and downloadable materials to share on social media. There is really no shortage of additional income streams you can create using your expertise as a therapist that can help grow your private therapy practice.
One of the number one ways to grow your private therapy practice is referrals for new patients. In fact, they are the engine that runs any successful private practice. Depending on your practice and specialization, the best referral sources for therapists can come from professionals, therapist matching services, or self-referrals.
Professional referrals would be considered by doctors or other healthcare professionals. The best way to cultivate this type of referral is to simply be known by doctors or other health professionals. Most doctors keep a list of therapists and counselors that they regularly refer their patients, so make sure you’re on those lists. If you aren’t super connected with healthcare professionals, it might be worth looking into some industry network opportunities to make some new contacts. You could also partake in some direct marketing for therapists by creating flyers or rack cards to take to the health care providers in your area. Alternatively, you could use something like coordination of care form to send to the primary care doctors of current clients as a way to make a new contact. Just have clients sign a release to just coordinate with their physician and send the form along with a flyer letting them know you are accepting new patients. Another great way to get new clients for your therapy business is to coordinate with other mental health professionals and clinicians. At times when their clinic is fully booked, they need to send patients elsewhere-- with good connections that "elsewhere" can be your counseling practice.
Most likely, your most effective source of referrals will be self-referrals. Having a simple, informative website will be a huge asset for self referrals. It’s natural for people to do a quick Google search when they’re considering therapy. Your website’s priorities should be the visible contact information and the ability to schedule an appointment. Other places people will go to when self-referring are with their insurance plans or matching services like Advekit.
It takes a long time to build a successful private therapy practice, and it can be slow to start. Unless you have a large enough cash reserve to float you, it’s smart to start with a part-time private practice. You can build momentum as a side hustle while keeping your main gig until you have enough clients to fully go out on your own.
The wisest thing you can do while you are growing is take the income from the private practice and reinvest and/or build a cash reserve. A best practice is to have at least two months of your total practice income and expenses in reserve for yourself. So, instead of paying yourself, you would put the money made by your private practice into a savings account. Ideally, you keep doing this until your practice is full and has the financial ability to transition into full time.
Investing also means putting dollars into effective marketing. It can feel difficult justifying putting resources into marketing efforts, especially if you’re just starting out. But it helps to think of it this way; If each new client brings in an average of $2,000 annually, an extra $20 or $50 per month on media or PR efforts is worth it. If each new client is worth $2,000 to your practice’s bottom line, it makes sense to even spend $100, $200, or even $500 on their business.
Oftentimes, a therapist will describe their practice as “full.” Now, full practice could mean different things to different practitioners. For instance, a therapist could only be interested in taking private clients twice a week, so for her, full means about 15 clients. The idea of “full” is purely based on a schedule. However, it’s also dependent on dollar amounts. You’ll want to consider how many patients you’ll need to have at a certain rate to meet your financial goals.
When you have a good hand on what “full” looks like for your practice, you can begin to track your progress. Though, it should be noted that you’ll need to take cancellations and no shows into account. It’s possible to minimize loss through clear and strict cancellation and no show policies, but not foolproof. Another workaround is to book more appointments than you actually need for the week. Essentially, book past your “full” each week. For instance, if you need a minimum of 10 appointments per week, plan 15 slots on your schedule. Another important factor in tracking is repeating and returning clients. If you tend to see established clients once a week, you would only need 20 clients to be full. If you tend to see most clients every other week, you would need 40 clients to be full. So as you are tracking growth, it’s not just about the number of appointment slots to fill, but also the number of regular clients.
The simplest and most accessible way to track is using a spreadsheet to follow your data, which will include the number of visits per client (length of stay), session rates, office expenses, and a portion for reinvestment back onto the practice. You could also always invest in an app or software to help track information as well.
This might seem like an obvious or silly suggestion, but it’s worth noting and taking to heart. If you want to grow your private therapy practice, you have to not only talk the talk, but you also have to walk the walk. Take your work seriously, be there for your clients, and offer the best, most appropriate treatment. When you don’t know something, figure it out.
Be nice. Write thank you notes that include 1-2 of your business cards. When you do this, you’re staying top of mind, showing you are courteous, and communicating well. Give out your cell phone number to referral sources. Let them know that if they ever have a complex client, need to personally vent, or aren’t sure what to do; you are there for them. Finally, be active in your community as a mental health professional so you can be your own referral. This doesn’t necessarily mean being involved just for the sake of new business, but more than you are known and trusted within your community.
Starting and growing a private practice is a lot of work, especially in the beginning. It is the kind of hustle that feels exciting, but being self-employed can be a rollercoaster. At Advekit, we work hard to make your life easier. By acting as one of your main referral and marketing sources, you will have so much more time to focus on building relationships with your clients.