You went into the field of therapy for a reason, probably several reasons. You want to help people. You want to make a difference in your community. You want to use your skills to make lives better. You know that just as medical healthcare professionals are crucial to physical health, mental health professionals are equally needed for strong mental health.
All these noble motivations make it worth the hours of study in graduate school and the work you put in every day. Yet, as you affect lives and connect with the community, another equally important motivation exists. You are working to make a living in your own business. It is possible to help people and connect with the community by doing volunteer and nonprofit work. Your full-time profession is different. You need to make money, pay your bills, and provide for your family.
Therefore, in this blog, we will see how much a private practice owner can make by exploring the following areas:
- Factors that affect earning potential for private practice owners
- Methods to increase solo practice income
- The increased earnings of group practice owners
- Launching a group practice
- Next steps toward your financially thriving practice
Tens of thousands, hundreds of thousands, and even millions of dollars are possible in your mental health practice. Let’s explore how.
Factors That Affect Earning Potential for Private Practice Owners
The income of private mental health practice owners can vary. It is based on several factors. These include the following:
Location: The geographical location of the practice plays a significant role. Practices in areas with high demand for mental health services or a higher cost of living may have greater earning potential.
Specialization: Mental health practitioners and clinicians with specialized expertise or those offering unique therapeutic approaches may attract a specific clientele and draw higher fees.
Experience and Reputation: Established practitioners with years of experience and a strong reputation may draw more clients and earn higher fees.
Operating Costs: There are many business expenses associated with running a mental health practice, including rent, utilities, administrative staff, and paying premiums to your insurance company. All these will be deducted from your gross revenue. Effective practice management makes a substantial difference.
Marketing and Referrals: Successful marketing strategies with a strong referral network can contribute to a higher caseload and improve the practice’s financial health.
Methods to Increase Solo Practice Income
The typical salary of a therapist, based on the May 2022 National Occupational Employment and Wage Estimates in the United States, is between $37,990 and $111,800. If you want to push your income towards the upper end of that range or even beyond, there are some ways that you can make that happen. Some methods to consider are the following:
Increase your rates: As a self-employed professional, you can set your own rates. As your reputation grows and your services are more in demand, you may be able to increase your rates, filling your caseload with high-paying clients.
Work more hours: Offering some evening or weekend hours can increase the number of hours clients can schedule your services. More hours added to your caseload means a higher annual salary, but this comes with significant risk. Self-care, family time, time with friends, and leisure activities will all suffer as you work extra hours.
Expand your service: As a therapist in your own practice, you have skills that can reach beyond the traditional therapy office. These expanded services may include the following:
- Telehealth appointments
- Consulting services
- Educational classes, workshops, or conferences
- Creating and selling products such as books or online classes
These and other services you may have the skill to provide can expand your therapeutic influence and your bottom line.
However, all of these methods have obvious limits. There is a limited amount of time in the day. Your rates must always adhere to the economic conditions of your location. The number of services you can provide as an individual will have limits. Your skill set, energy, and schedule will all limit the number of services you can provide in a solo practice.
If you want to expand your earning potential from thousands to millions, it will mean moving into the realm of a group private practice owner.
The Increased Earnings of Group Practice Owners
The average salary for business owners is between $74,920 and $189,520. How much you pay yourself will depend on the revenue of your business. Still, a group practice owner will make significantly more money than someone running a therapy practice independently.
Yet, that is only the beginning. When you move beyond work as a private practice therapist and own your own group private practice, the earning potential can increase into the multi-million range. This is because your caseload is limited only by your marketing skills and employee hiring practices. As you invest in marketing, grow your reputation, and bring on talented employees, your earnings continue to grow.
Launching a Group Private Practice
When you are ready to move toward your highest earning potential, there are some critical factors you need to consider. As a solo practice owner, you focus on therapy, health insurance, liability insurance, malpractice insurance, and office space. As you move to draw a group practice owner salary, there will be other necessities, such as the following:
Cultivate a Business Mindset: When you become a grad of your alma mater with an advanced degree in social work, psychology, or counseling, you possess many skills. Yet, your focus may have been on your private practice salary, not business. Running a business will require a mindset shift to embrace your business skills and expand your earning potential.
Develop a Business Plan: You will need to be able to define your business plan, know all that it includes, and set your goals.
Choose a Business Model: You must educate yourself on the various business models. Once you understand your choices, develop a clear decision-making path to find the best option.
Choose a Business Structure: Find the right accountant to help you create the proper business structure. Your accountant can help you develop your business as one of the following structures:
- Limited Liability Company (LLC): A Limited Liability Company (LLC) is a popular business structure that provides liability protection with some tax benefits.
- S corporation (SCORP): An S corporation (SCORP) is a type of business structure that provides the benefits of a corporation.
- C corporation (C-corp): A C corporation (C-Corp) is a type of business structure that is a separate legal entity from its owners.
Develop Your Marketing Practices: You will need to develop your marketing plan, including social media, making sure it aligns perfectly with your purpose, mission, and vision.
Develop your Hiring Practices: Sound hiring practices will require an understanding of the following:
- An Employment Attorney’s Role in a Group Practice
- Payroll Procedures in Your Group Practice
- Human Resources in Your Group Practice
- Employee Relations in Your Group Practice
Focus on Personal Development: The work of personal development will involve self-assessment, clarifying your goals, developing a support system, and learning to celebrate your victories, big and small.
Launching a group practice in order to increase your gross income may seem like a lot of work, and it is, but you do not need to do it alone. A business coach is essential when you are launching your group private practice. You will be moving from an earning potential of thousands to millions. It is a big move, and you should not carry that load on your own shoulders. Find someone who has navigated that journey and can guide you on the path to business and financial success.