Of every therapist that I’ve ever spoken to, I would wager a bet that close to 90% of them have expressed a desire to have a private practice that supports them. However, only a small fraction of therapists actually build their practices to a place where they can be fully supported. What gives? If so many people want it why are so few actually doing it?
First of all, if you want to create a successful private practice you need to have a solid and strategic plan in place. That’s what this post is all about. I’m going to show you how to create a Private Practice Business Plan, which is one of the first things you should do if you’re interested in one day earning a full-time income from your practice.
Often times therapists have a hard time seeing themselves as business owners and the idea of creating a business plan seems far-fetched. However, at their core, business plans are used by nearly all profitable businesses in the world. And you do want your practice to be profitable, right??
Creating a business plan for your private practice gives you the opportunity to clarify all of the specifics, do important research, and create strategies that will propel you and your practice forward. It is essentially a roadmap of your private practice business, written with your audience in mind.
I’ve included some free worksheet for you that will guide you through this post and allow you to create a free Private Practice Business Plan that you can download, print out, and keep forever!
Now we’re ready to get started! I really want to encourage you to take your time moving through this process. I know many of you will simply read through this and maybe answer the questions in your head. But, like most things in life, you get out of it what you put into it. The more seriously you take this the more successful you will likely be. And with that...Here are the key components of a Private Practice Business Plan:
STEP 1: EXECUTIVE SUMMARY
This section sounds very formal but really it just sums up everything else that you will describe in the rest of your business plan. For that reason, I strongly suggest you save your executive summary for last, after everything else has come together. Here is what you will want to include in your executive summary:
1. Your Mission Statement
This briefly explains what your business is about. What purpose does it serve and why did you create it? Again, I strongly encourage writing your mission statement at the very end, as it can be overwhelming to start with your mission. However, it can be helpful to start to think specifically about who you want to serve and how you want to work. In order to know what purpose your private practice serves you need to know who you want to serve, and who you don’t want to serve.
2. Highlights of Your Growth and Special Skills
If you have been in private practice for some time already, this is the section where you will describe any growth that your practice has experienced. This can include raising your fee, an increase in the number of clients seen per week, or more speaking engagements booked. Even if you haven’t opened the doors to your practice you can still describe your growth by reflecting on any special skills you may have. Examples of this may include, “I have been trained in family therapy and this is a specialty,” “I have experience working with eating disorders,” “I am really good at working in the transference, doing intake sessions, or completing paperwork.” Not only does your growth contribute to your overall business but it can be very motivating to stop and really reflect on that growth!
3. Your Products or Services
You will get into this in more depth later on but this is an opportunity to write down a few sentences about how you monetize, or plan to monetize, your private practice. Do you offer counseling sessions to individual, couples, families? Do you run any groups? Do you sell any products such as books or workshops? Do you have any paid speaking arrangements?
4. What Are Your Goals?
Try and be as specific as possible. Don’t just write down that you want a “full practice.” Define what a full practice means to you. Break down your practice to determine how many clients you want to have and what demographics you want them to be and what percentage you want to be full fee, sliding scale, or managed care. Also, when do you want to achieve your goals by? From here break down what steps need to be taken in order to reach these goals. It can be helpful to identify what needs to be done (both clinically and administratively) once you’ve envisioned your ideal practice. Here’s an example of a goal list:
Develop a presentation to give to parents of teenagers
Create new website emphasizing specialty in adolescent girls
Take a continuing education course in Mindfulness
Teach a psychology class to grad students
Research and choose an electronic records program
Schedule one new coffee or lunch date per week with potential referral source
STEP 2: YOUR PERFECT PRIVATE PRACTICE BUSINESS DESCRIPTION
In this section of your Business Plan, we are going to get in depth about the organization and culture of your private practice. This may not feel natural or fitting, especially as many of us embark in private practice on our own, but you are still building a business, which includes building a brand, even if it is just you as the brand for your private practice.
1. What Sets You Apart from Other Therapists?
This is such an important question to put real thought into. Why would someone choose you over another therapist? What do you bring to your practice that is uniquely yours? This can be a specialization such as teenagers with eating disorders, or perhaps a treatment method such as working interpersonally. This can also be something more personal such as a personality style that you bring to your sessions such as an easy going demeanor, or your use of humor. Maybe you have a personal story that has shaped who you are and what you bring as a therapist. Use this question to really examine your unique qualities and what you can do to separate yourself from other therapists.
2. Who Do You Serve?
This is probably one of the most important questions a therapist can ask themselves. And again, it is so important to be as specific as possible. One of the biggest mistakes I see therapists make is not being specific enough about who they want to work with. The age old question of “should I specialize or not?” For the purposes of building the private practice of your dreams you must allow yourself to know who your ideal client is. And I will not accept that you like working with everybody!!
a. How old are they?
b. What do they do for a living?
c. What brought them to your office?
d. How can you help them?
e. What are their future goals
f. What are their hobbies?
An example of this might be, “My ideal client is a 25 year old, college educated female, who is driven and passionate about finding success for herself. However, she struggles to define what success truly means for her as she comes up against internal pressures of perfection as well as external expectations. This struggle shows up for her as dissatisfaction in romantic relationships, her body, and/or her career. She will often times use food as a coping mechanism, either indulging in or restricting as a way to feel some escape and control. She is open-minded and progressive in her views, she’s believes in mind-body approaches such as yoga, meditation, journaling, and breathing exercises. She values therapy and is committed to using the time to connect deeply and authentically.”
3. What is Your Company Culture or Personality?
Even if you’re just a one-man show, and aren’t yet running a company that you think would have a culture, answering these questions will help you analyze the personality of your private practice. Again, this may not feel natural as an individual just starting out, but it’s important to remember that developing a true personality for your private practice will allow you to be consistent. Also, know that it’s okay, and even natural, to try on different hats in the beginning of this process, but the most successful therapists and private practices are the ones that have a distinct personality, and ideally that is inline with your true personality!
a. When people interact with you and your private practice, how do you want them to feel?
b. What words would you use to describe the personality of your private practice?
c. What purpose does your private practice serve?
An example of this might be, “ My practice is relaxed and comfortable and reflects the beach culture of the community I practice in. When people visit my website I want them to get a sense of who I truly am by the colors I use, the way that I write, and the information I provide. I want my office to have this same feel and reflect a sense of peacefulness when you are there. My private practice serves to offer a healing, safe place for people to come and ideally have a transformative experience of growth and inspiration.”
4. What is the Organizational Structure of Your Private Practice?
You may not have the answers to this question yet, and that is okay, but it is something to think about. Are you incorporated or do you operate as a sole-proprietor. Do you have employees? If so, how many? Do you work with insurance companies, either on panels or as an out-of-network provider? Do you offer a sliding scale? What is your full fee? What percentage of your clients are full-fee? Where do you want to work and what do you want your space to be like? How much do you want to work in your practice? How is that time divided between face-to-face client hours, marketing activities, writing, etc.?
STEP 3: MARKET AND COMPETITOR ANALYSIS
When opening your private practice it is important to research your market and understand who else is already out there doing what you do, i.e. your competitors. I actually don’t like using that word but I haven’t come up with something better, I’m open to suggestions if you have any!!. Truthfully, I highly discourage having a competitor’s mindset, because other therapists will be your lifeline in your private practice. They will be your colleagues and friends, your referral sources and your outlet for processing all of the um, unique, experiences we have as therapists. However, you will want to know who is already out there, are they serving your community, is the area you’re looking at overly saturated, is your ideal client a part of the community, and so on.
When doing your market and competitor analysis you’ll want to:
1. Identify who your competitors are.
Make a list of all of the therapists in your immediate area. Find out who else specializes in working with your ideal client. Who has the type of private practice that you want. If you have been around for awhile you may already know who those therapists are. If you’re new to the block, you may have to use a therapist directory, such as PsychologyToday, to find some of these.
2. Research their strategies and goals.
Often times this can be done by checking out their website, social media accounts, or genuinely getting to know them (my personal favorite).
a. What do they promote and how do they promote it?
b. Are there any strategies that you see many of them using?
c. What sets each of them apart from the other?
3. Know their price ranges for their services and products.
This can help you assess what the going rate is in your area so you can determine your fee accordingly, or set yourself apart by perhaps offering a more affordable fee, without selling yourself short of course!!
4. Create a list of what you perceive to be your competitor’s strengths and weaknesses.
This activity is not about tearing apart the other therapists or putting anyone down to make yourself feel better. This is an excellent activity for helping you find yourself and your own voice in your practice and your marketing efforts. By identifying what you think is working and not working in those around you, you will learn where to invest more of yourself as far as marketing and what policies, procedures, and business plans to implement for yourself.
One final thought on competitor analysis: remember when you’re researching to look with analysis eyes, not copycat eyes! The world doesn’t need another so-and-so, the world needs you! Also, try not to get down on yourself when you see that others are farther along than you. It can be very easy to fall into the “compare and despair” trap, especially when you are just starting out. Remember, building a sustaining practice takes time, but you’re here now, and if you continue to show up consistently for yourself and your practice it will grow into what you want it to be.
STEP 4: CLIENT RESEARCH
In Step Two, you identified who your ideal client is. In this step, you will dig even deeper into understanding your ideal client. In a traditional business, client research is often done using surveys and other analytical statistics, if you want to go that route, great, however, I find it is more useful to actually utilize this as a creative process.
1. Research your audience by doing a survey.
Surveys are a great way to understand your ideal client better without having to guess. Unfortunately, surveys don’t necessarily lend themselves to our field. I suggest doing this as a creative process and writing your own answers to a survey from the voice of your ideal client.
a. What are the three most important questions you can ask your ideal client and how would they respond?
Some examples of helpful questions might be things like: what is the first thing you think about when you wake up in the morning? When you’re lying awake in bed at 3am, what is keeping you up? What is the last thing you think about before going to sleep at night? What goals do you have for yourself in the next year? What is keeping you from reaching your goals? What do you hope to get out of therapy? How committed are you to therapy?
Once you have your questions, put yourself into the character of your ideal client. How would they answer these questions. What would their voice and tone sound like, how much thought would they put into it. Allow yourself to become your ideal client and answer these questions.
2. How can you help your ideal client specifically?
Using your Practice Personality from Step 2 and your Competitor Analysis from Step 3, how can YOU help your ideal client? What sets you apart from the other therapists in your area or specialty and allows you to help people in a different way? You don’t have to reinvent the wheel here, you will be using many of the same techniques and offering many of the same services. This is about adding your authentic personality and flair to your practice. For example, “I can use my creative side to decorate an office that is beautiful and soothing and provides clients with an opportunity to truly relax,” or, “I can use my creativity to use art techniques, such as painting, as a creative outlet for healing eating disorders,” or, “I can use my sense of humor to bring some light-heartedness to therapy and help clients feel more comfortable opening up.”
STEP 5: BUILDING COMMUNITY
We all know, or have heard, that private practice can be very isolating. It is critical that you build a community around you and your practice, both for your sanity and for your success! Your community needs to know you exist in order for them to find you and for you to build your practice. This section will focus on what you want your community to look like.
1. Other professionals.
One of the best ways to grow your community is to get to know who else is in your community.
a. Who are the other professionals in your community that have access to your ideal client?
Examples might include other therapists, physicians, churches, businesses, etc.
b. What strategies can you comfortably use to build relationships with these professionals? Perhaps you can set aside an hour a week for coffee or lunch with these other professionals, allowing yourself to genuinely get to know them, and them to get to know you. Or maybe you can put together one or two presentations that you can give to the professionals in your community, and perhaps one or two presentations that you can give to clients once you’ve connected with the professionals.
2. Social Media
This tends to be a dreaded topic for many therapists, however it can be a very accessible way to get your name out there to your community.
a. Which social media platforms do you feel the most comfortable using?
b. Which social media platform does your ideal client hang out on most often?
c. Are there any ethical concerns you need to address in using any specific social media platforms?
d. Which strategies will you use on each platform to help grow your audience and build your community?
e. How will you find your target audience?
STEP 6: YOUR SERVICES AND/OR PRODUCTS
For most therapists this section of your business plan will focus mostly on the services that you offer. However, some therapists might also sell products, such as books, workshops, or speaking engagements.
1. What do you (or will you) sell?
Get specific here. Don’t just write down “psychotherapy.” Describe your services in detail. For example, “I offer 45-minute, psychotherapy sessions for individual adults, struggling with relationship issues, for $200/session.” This is the section where you want to be as detailed and as clear as possible. All therapists offer “psychotherapy” what makes you unique? If you’re struggling to define that still, use this space as an opportunity to brainstorm a little bit. What areas do you know a lot about? If you are an intern, what questions do your peers come to you for help with? Do you know about body work, group work, experience with cutting, do you help parents set limits for their kids?
2. How does your service benefit your ideal client?
Oftentimes I see therapists struggling with a loss of faith in the work that we do, which can be very disheartening, as well as negatively impacting our business. This section allows you to really process, explore, and define how your services will help your clients.
If you are offering individual psychotherapy to adolescent girls with eating disorders, what are they going to get from the experience that will provide benefit to them? Is it the therapeutic relationship and the opportunity to experience genuine compassion and acceptance that will be of most benefit. Will you teach them particular techniques and treatment interventions, such as mindfulness, that will provide them benefit. Will you act as a mentor and an example of experience, strength, and hope as someone who’s gone through it and come out stronger on the other side.
Please invest time into this question, because this will help you understand WHY you are doing what you do, and when we are connected to our WHY, we are connected to our purpose.
3. How are your services different from the others in your market?
Again, as therapists, many of us are offering the same “psychotherapy” services, remember we don’t have to reinvent the wheel here, unless you want to, then go for it! For most of us, the response to this question is again about bringing your unique personality to your private practice model.
STEP 7: MARKETING AND SALES STRATEGY
This is it, the final part of your business plan. Finally we are going to dig deep into your marketing strategy, because once you build your private practice model, you need to go out there and promote it!
1. How will you market your private practice?
Take some time to write down all of the ways, specifically, that you will promote your practice. Are you going to give community talks, maintain a blog, send out mailers, or use Google Adwords? Think critically and honestly about this one. If you are painfully introverted, please don’t write down that you are going to give 2 presentations a month at your local community center. What marketing activities are you comfortable and realistically willing to commit to on a regular basis?
2. How much time will you spend on marketing activities per week?
This may be one of the most important questions to ask yourself and one of the hardest parts for a new private practice. Building your reputation takes time, be realistic about how much time you are willing to put into it. Generally, a good rule of thumb and formula to use to determine how much time you need to put in is: Ideal number of clients per week - Actual number of clients per week = How many hours to put into marketing. So, if I want to be seeing 25 clients per week, but I’m only seeing 4 clients per week, that means I should be putting in 21 hours a week into marketing activities. When you are just starting out you will need to be putting much more time and effort into marketing than when you have been around awhile and your practice is a bit more full.
3. If you haven’t yet opened your practice, what strategies can you use to promote it’s opening?
Or, if you’ve been around awhile, what can you do to make yourself relevant again, or bring back some attention to your practice? Again, consider your personality type. If you are an extrovert and love hosting, maybe you plan an “open house” mingler. If the idea of hosting a party makes you cringe, perhaps you can send an email to all of your contacts letting them know about the latest CEU you’ve taken and your interest in working with a particular population.
4. What is your growth strategy?
What will you continue to do, or do ongoing, to ensure that your practice continues to build, grow, and remain relevant? Will you continue to give community presentations, maintain a consistent blog on your website, network with colleagues on a regular basis, grow your practice to include interns or other practitioners. Where do you see your practice going and what steps do you need to take to get there?
Congratulations to you! If you have taken the time to truly go through this business plan and invest your time and effort then you are ready to build your perfect practice.
Now I want to hear from you: What is something you struggle with in terms of turning your dreams of private practice into a reality? Let’s chat down below in the comments section!