As a mental health professional, your focus is to help people work through their psychological or physical trauma and get back to living life to the fullest. But as a business owner, you have a lot of other things you also need to manage.
Unfortunately, your professional experience did not prepare you for maintaining and growing a successful private therapy practice.
Running a business is complex, and there are many reasons private practices fail, but in the post, we’ll review some of the top reasons and ways you can avoid them and mitigate that risk.
Lack of business knowledge
Private practices fail due to a lack of business knowledge and ability to manage the business side of the practice. You only want to help people, but you can’t focus on only being a mental health professional now. A lack of knowledge about accounting, marketing, human resources, and finance can prevent therapists from excelling in business management, so you must learn these areas.
Invest in introductory business courses to fill in the gaps in your skills and outsource where necessary and possible.
Lack of business plan & goals
A business plan creates a strategic focus for success so that your actions are all moving toward a goal.
Create a good business plan that includes a market analysis, SWOT analysis, marketing strategy, financial projections (which acts as a budget) and more, to fully explain the direction of your practice. It will allow you to spot issues and deal with them proactively as well as use your plan to track your progress and adjust along the way.
In coordination with a business plan, it is also important to measure the success of your business using KPIs or key performance indicators. Implement 2-3 that apply to your business such as cancellation rate and client retention rate.
Neglecting your online presence
When looking for any service, most people look online, which is why you need an online presence. Marketing is critical for gaining new clients, and getting your business online consistently will attract your ideal clients. But if you’re not online, most likely they’ll find someone who is.
A website allows your potential clients to find your business, learn more about you, browse your services and hours of operation and allow them to contact you – maybe even book an appointment!
In addition to your website, you can get your listing on one of the online therapy directories or share it on social media. There you can share valuable insights and have helpful discussions to gain trust with your followers.
Failing to research & understand your market
It is essential to define your target market because then you know who you’re talking to when you’re marketing, what they want and need, and you’ll attract the people you want to work with.
This can simply mean understanding the needs of the potential therapy clients you want to work with and their needs. You can get this information by researching your potential clients or asking them for feedback.
Low client satisfaction
Helping your patients get better is crucial to patient satisfaction, but there is so much more to a patient’s happiness than this. And we can often let down our patients in ways we didn’t realize, such as failing to manage their expectations about treatment when progress isn’t made immediately, lack of communication, or difficulty making an appointment.
Ask for your client’s feedback during and after their sessions, take in their feedback and use it to improve.
Failure to adapt to changes in the industry
The mental healthcare industry is changing, and private practices need to adapt. This may mean offering virtual appointments to accommodate people’s busy lifestyles or taking courses on new treatments.
The industry is constantly evolving, and you must be proactive about adapting to that change. It is important to stay connected with other practitioners to help you stay up to date.
Not tracking and understanding finances
Many private practices fail simply because they don’t understand how to manage their money effectively. If you are not tracking your income and expenses, you cannot see where you’re at and make decisions for your business. It’s not enough to just track your finances; you also need to understand them.
Track your finances diligently, review regularly and learn how to understand the reports. Outsource to a trusted accountant who can help you here.
Cash flow issues
Cash flow issues can arise from several things, such as low income, high expenses, and late payments from clients. No-shows and cancellations without time to re-book also impacts the business financially.
Cash flow issues will be easy to spot if you are tracking your income and expenses regularly and accurately and there are options to improve before it becomes a major problem.
For example, if the issue is late payment, then collect payment upfront and don’t book additional appointments until paid. If the issue is no-shows and late cancellations, establish a policy to decrease this or at least get paid for the missed time.
In the meantime, create a financial buffer to allow for slow times.
Let Leichter CPA help you succeed
There’s a lot to navigate when owning a private practice, so getting help from others is important if you want to succeed.
If you’re finding it challenging to manage your finances or don’t have the time, Leichter Accounting Services is here to help. We specialize in bookkeeping, accounting, and tax service for small businesses with friendly, professional support.