Interest in private mental health practices is growing, but what if you don’t make enough money on your own? This is the million-dollar question, and the answer is formulaic in nature. Practitioners face a range of financial quandaries that can disrupt cash flow. This complex web can be easily untangled by applying specific money management methodologies that ensure you make a profit and get paid. This is what six-figure private practice therapists have figured out, most likely with the help of a professional financial services provider.
A growing number of private practice therapists are turning to SMG for proactive cash flow management, helping them go from staying afloat to smoothly sailing. Here are the top areas of financial guidance we see private practices needing:
Pricing
How do you decide what rates to charge for your services, especially if you work virtually across state lines? You’ll need to consider your income goals (and more specifically, how much money you need to make to meet those goals), business expenses, what your ideal number of sessions are per year, and more.
Taxes
Private practice therapists can work under a variety of business structures with different tax implications. Do you need to pay the self-employment tax? What forms do you use for reporting taxable income over a certain threshold? What expenses qualify as business deductions, and are there any credits you can claim? Taxes are without question our biggest focus area for clients across the board.
Expenses
What percentage of your earnings should you set aside for overhead and other expenses? You’ll need to consider your leased office space and if operating virtually out of your home, what are your allowable home-office expenses , marketing, office supplies, business cards, and the price of medical, dental, and liability insurance. How do you balance these costs against what you make?
Billing and claim management
How do you set up a billing structure that ensures you get paid in a timely manner? A DIY approach can be riddled with setbacks and expensive pitfalls. On top of this is the sheer time intensiveness of manually gathering all client information and inputting it into whatever system you use to generate claims (keeping in mind human errors that cause claim denials).
SMG is specially qualified to help private practice therapists clarify their costs, streamline financial management, and maximize cash flow. We can work with you one-on-one, or you can join our Cash Flow Bootcamp at a low, fixed monthly price – perfect for anyone at any level to master their practice’s cash flow!