Without sitting down with you directly, it’s impossible for me to know why your therapy practice may be struggling financially. However, if you’re having money problems, I’d love to share five of the most common reasons that come up for therapists in private practice. You won’t relate to all of them, but if any of these apply to you, it’s likely time for a change.
Low paying clients
For many of us, for whatever reason, it feels uncomfortable to charge a lot for therapy services. After all, we became therapists because we truly care about other people and their well-being, and doesn’t part of their well-being come from financial security? We hate to put our clients into a financial hole, so sometimes we undercharge out of the goodness of our heart.
Or perhaps we simply undercharge because we wonder if we’re really worth it.
Whatever your reason, if you are undercharging it is hurting your business, your livelihood, and your career.
The truth is, you are creating a career here. You are supporting yourself with this skill you have worked hard to learn and develop, and perhaps you are even supporting employees with it as well. It’s a big responsibility, and it goes far beyond bending for your clients or wondering if you’re worth it. You are worth it.
What are you worth, exactly? You’re worth having all you need to give what you’re meant to give.
That amount is different for each of us, and you’re the only one who can determine what rates are right for you. I can guide you in figuring out what you want or need to charge, but I can never tell you how much you “should” charge.
What I can tell you is that if you’re struggling financially right now, undercharging may be a huge contributing factor. If it’s time for a change, there’s no time better than now.
Over-diversification of Services
In business we talk a lot about diversification when it comes to revenue streams. For example, trusting your entire business to one large contract or revenue source is a huge risk if that revenue stream becomes suddenly unavailable. I am a huge advocate for this type of diversification, but it’s not what I’m talking about here.
The overdiversification I’m talking about here is the common mistake some therapists make of trying to serve every type of client. Children with disabilities, teens with mental health challenges, hospice clients, elder care facilities, and postpartum care. If a therapist is creating a business around serving all of these populations under the same roof, it becomes extremely difficult to gain traction. Your ideal clients will be confused when they see you putting out messaging geared toward somebody else, and they may wonder if you’re really qualified to help their unique situation.
When you make a choice on who you serve and how you serve them, you get to make a name for business in your community. You can become the go-to person for a particular person with a particular problem, so that person will think of you when the time is right.
So, if you’re struggling financially, ask yourself if you are trying to serve too many people at once. If you can make a decision on where to start, you will not only save time and money on your outreach efforts, but you will send a clear message that will attract the clients who need your services.
High expenses
All too often, we think we’re having income problems when the reality is that we simply have a spending problem. True to the consumerism culture to which we are accustomed, we often think we need more than we really do, and this leads to high spending that doesn’t need to happen.
Consider your monthly expenses. Is there anything you could cut out that could give you an immediate raise? $20 here, $40 there, it adds up quickly and could make the difference between making your next car payment or feeling strapped for cash.
I invite you to take a close look at where your business expenses are going, and decide how much you really need the things you’re spending your hard-earned money on. Perhaps you could cut out a subscription, purchase fewer materials, or even look for a different office space if your rent is skyrocketing.
Whatever it is, we are often not drowning as much as we think. There is wiggle room, and this is the time to find it.
Not knowing your numbers
If I were to ask about your typical monthly profit margin, your average monthly net income, or what you have budgeted for monthly operating expenses, would you be able to tell me?
If you’re like many business owners, these questions may cause pause, and not because you’re unqualified as a business owner. The hesitation may come either because you don’t know where to find the information, or you’re not convinced that it’s important to know.
Whatever the reason, not knowing those numbers is probably hurting you. Why? Because you may be spending more than necessary, not making as much as you thought, or underpaying yourself without realizing it.
When you have a business budget and target margins, you set a clear intention for yourself and your company. Getting clear on your goals will enable you to create a business that is healthy, thriving, and gives clear signals when something is not quite right. If you don’t know what to look for when things are good, you won’t know the signals when things are going south.
It’s time to know your numbers!
Lack of measurable goals
The last common hangup I see in business owners who are in financial struggle is a lack of measurable goals.
When we simply say “I want more clients”, it gives a vague direction toward growth. But imagine if you knew exactly how many clients you needed, and by what date, in order to reach your financial goals?
You might calculate that you need to bring in $4,000 more per month. You do the math and find that’s $1,000 per week. If you know your rates are $100 per session, that would mean 10 new private clients per week.
Now, instead of “more clients” which has no boundaries, you know that you need 10 new clients to reach your financial goal. You’ll have more clarity on how to get those 10 clients, and you’ll appreciate each one as they come in.
You’ll also get to celebrate when you reach that goal, because you will have accomplished something amazing that you set out to do.
When you set clear financial goals, you set yourself up for success, and your business will thrive.
Now, if any of these potential reasons resonate with you, know that you are not alone. The reason they’re here is because they come up frequently, and the great news is that they are frequently solved as well.
You’ve got this!
Jaycie
P.S. If you’d like to get more clarity on the root of your financial struggles, let’s connect. Book a 1:1 call today and I will help you find financial freedom in your business.
I’ll see you soon!