Mind Your Own Business!
As psychologists in private practice, we have a double job – doing great clinical work, while at the same time taking care of business matters. For our clinical role, we have had extensive education and training, and we continue to improve with experience and with additional learning.
In contrast, most psychologists have had little, if any, training or experience in business. Couple that with complex psychological and value-laden issues around making a profit from helping people in need, and you have a recipe for a struggling practice.
You don’t need an MBA to be successful in business. But there are some key areas that need your attention. Dr. Jeff Zimmerman, author of Financial Management for Your Mental Health Practice: Key Concepts Made Simple, sums up business activities as “finding, grinding and minding.”
Finding refers to generating referrals. Business activities around finding include marketing, advertising, and networking, with the goal of gaining visibility in your community and building relationships with referral sources. Effective finding helps fill your practice with the types of people that you enjoy working with.
Grinding is the actual clinical, teaching, or consulting work that you do – the work that produces income for your practice. Grinding also includes documentation, report writing, and other client-centered activities.
Minding means paying attention to the daily and long-term business aspects of your practice. These include administrative tasks, such as billing and bookkeeping, as well as risk management related to HIPAA, ethics, laws, and regulations. From a larger perspective, minding involves creating and using a business plan that outlines goals and activities, and tracks income, expenses, and cash flow. In this way, you can quickly spot patterns that may impact your current and future income, and make changes accordingly.
Too many clinicians focus only on the grinding aspects of their practice because that’s what they feel most comfortable doing, and it’s what gives them the most satisfaction. Finding and minding are left to “someday, when I have time.” But here’s what can happen when you don’t pay attention to these two aspects of your business:
1. Without finding (marketing, advertising, networking), you essentially wait for people to contact you. If they don’t know about you, they’ll contact another mental health professional. Thus, you will likely have many unfilled hours in your schedule – which can mean tens of thousands of dollars in missed income. Even when you do get referrals, they may not be a good fit for you.
2. Without minding, you can end up in legal or financial trouble. For example, you may be scrupulous about maintaining confidentiality of what is shared in the context of therapy, but fail to oversee HIPAA compliance by employees or service contractors. If you don’t monitor your income, expenses, and cash flow on a regular basis, you may find yourself making uninformed business decisions that undermine your prospects of making a comfortable living. If you don’t carefully read the terms of your lease or the contracts you sign with managed care companies, you may later be surprised by stipulations (and related costs or restrictions) that you agreed to.
Another reason to pay attention to finding and minding
Your career satisfaction and financial stability notwithstanding, finding and minding can have a positive impact on your clinical effectiveness. When you work with people who are a good fit for your interests and skill set, and when you feel fairly compensated for your work, you tend to be more motivated and engaged with them.
Thus, you’re more apt to be attuned to their subtle words, omissions and behaviors – some of which may be critical to the outcome of treatment or evaluation.
Tips for minding your own business
- Set aside time at least every two weeks for marketing and for monitoring your administrative responsibilities. Put it on your calendar, as a formal appointment with yourself.
- Make a business plan. The U.S. Small Business Administration at SBA.gov has a variety of tools and tutorials that can help you get started.
- Sit down with your accountant to review your finances and to inform your business decisions, especially in light of the new tax laws.
- Learn from business-related sessions at professional conferences. At the upcoming APA convention Division 42 has several programs focused on the business of practice. In addition, you might be interested in attending a 7-hour workshop (with CE credit) on Friday of the convention, presented by Drs. Lauren Behrman and Jeff Zimmerman, and me.
- Check out your Division 42 perks:
- Each quarterly issue of The Independent Practitioner is packed with insights and advice for psychologists in private practice. Archived issues are available at Division42.org.
- Also at the website, under the Resources/Peer-recommended resources tab, is a growing collection of forms, templates, and links to practice-related resources.
- Consider joining a mastermind group that meets on a regular basis via phone or video chat to share ideas on business matters. More information is under the Community tab at Division42.org.
- Draw on the collective wisdom of your colleagues on the listserv. Post your question and you’ll likely get answers within a couple of hours, if not sooner.
p.s. Division 42 welcomes new members.
Please encourage your colleagues to join at division42.org/membership.