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Group Practice Mini-Series 1: Why Your Group Practice Finances Aren’t Working, Yet

Mini-series Ep 1 Why Your Group Practice Finances Aren't Working, Yet with Picture of Linzy

“It is a lot of work to run a group. A LOT of work. There are so many moving parts. Between all the admin that has to get done, managing other therapists and practitioners with their various personalities and their needs, insurance money not showing up, grumpy clients complaining to you about the services that they’re getting, clinical notes not getting done… Sometimes it can feel like you are working harder than ever, and it’s definitely not the passive income that you dreamt of when you started your group practice.”

~Linzy Bonham

In This Episode…

Do you sometimes wonder if you made the right choice by starting a group practice? Do the finances feel like they just don’t work? There are lots of great things about running a group practice, which Linzy explores in this episode, and there are also unique challenges that make being a group practice owner challenging. 

The complexity and responsibility of group practice finances can leave group practice owners feeling depleted and overwhelmed, with a financial puzzle that can feel way too complicated to solve. In this special episode, Linzy explores what can make group practice finances so uniquely challenging, and how to start to think about them to understand that change is possible.

If you are a group practice owner and want to learn how to be the confident financial leader of your group practice, the second cohort of Money Skills for Group Practice Owners starts in January 2024!

Want to work with Linzy?

Check out Linzy’s masterclass, The 4 Step Framework to Getting Your Business Finances Totally in Order, where you’ll learn the framework that has helped hundreds of therapists go from money confusion and shame to calm and confidence, as well as the three biggest financial mistakes that therapists make.

At the end, you’ll be invited to join Money Skills for Therapists and get Linzy’s support in getting your finances finally working for you. Click here to find a Masterclass time that works for you!

Episode Transcript

[00:00:02] It is a lot of work to run a group. Like, a lot of work. There’s so many moving parts between all the admin that has to get done, managing other therapists and practitioners with their various personalities and their needs, insurance money not showing up, grumpy clients complaining to you about the services that they’re getting, clinical notes not getting done. Sometimes it can feel like you’re working harder than ever, and it’s definitely not the passive income that you dreamt about when you started your practice. 

 

Welcome to the Money Skills For Therapists podcast, where we answer this question: How can therapists and health practitioners go from money shame and confusion, to feeling calm and confident about their finances and get money really working for them in both their private practice and their lives? I’m your host, Linzy Bonham, therapist turned money coach and creator of the course Money Skills For Therapists. 

 

Hello and welcome to our special mini podcast, Money Skills for Group Practice Owners. This podcast is appearing in my normal Money Skills For Therapists podcast feed, as you probably noticed, but the next few episodes that are coming out are going to be focusing on group practice only. Group practice owners, these next couple episodes are for you. We all know that solo practice finances can be emotionally daunting. I mean, I built Money Skills For Therapists on that premise, and hundreds of therapists coming through the course and accessing our support have definitely proven that point over and over again. But there’s a reason that group practice is even more difficult. 

 

Today we’re going to talk about why group practice feels so much harder than solo practice. First of all, let’s start with what it’s like to be a group practice owner from the dozens of group practice owners that I’ve talked to while I was putting together this course. I know that you love being a group practice owner some days. When group practice is good, we all know that it’s really, really good. You got to build something bigger than yourself. You can see it meeting the needs of your community, filling a gap in what’s available in your community. By having folks working for you, they’re offering specialized services that otherwise just wouldn’t be available in the way that you folks are providing them. You get to make a bigger impact than you ever could by yourself. You get to feel proud when you think about all of the lives that are impacted every week by your team, which is way more people than you can reach on your own. You get to enjoy the community that you built. You don’t have to work alone anymore. You get to mentor other therapists and practitioners. You get to have a team who share your vision and your values. And generally, you just have colleagues so that you’re not working alone anymore. That isolation that is such a hard part of solo practice goes away in a certain sense when you have a group practice. Now you actually have people that you’re working with all the time. You also get to wear different hats. You get variety. You get to be a leader, a mentor. You get to be an administrator if you want to. You can also hire that out, of course. And you don’t have to be a full-time therapist anymore. You get to use diverse talents and enjoy that variety. Plus, you don’t have to rely on seeing clients to get paid, which can get really tiresome. You have built something bigger than a 1 to 1 business by building your group practice, and you get to see the fruits of your labor and feel pride in all of that. 

 

But we also know that when it’s bad, it’s bad. Some days, I know many, many, many group practice owners are unsure if they made the right decision by starting a group practice. It’s heavy, carrying the weight of not just paying your own paycheck, which can sometimes be stressful enough in solo practice, but having to pay a whole team. You might worry about money a lot. You might hold your breath when you go to run payroll. Kind of that white-knuckled experience of being unsure if the money’s going to be there. It is a lot of work to run a group. Like, a lot of work. There’s so many moving parts between all the admin that has to get done, managing other therapists and practitioners with their various personalities and their needs, having to chase people and put out fires like insurance money not showing up, grumpy clients complaining to you about, you know, the services that they’re getting, clinical notes not getting done. Sometimes it can feel like you’re working harder than ever, and it’s definitely not the passive income that you dreamt about when you started your group practice. 

 

A note about passive income in general. That’s a term that I wish that we would just kind of cancel. If we could just take a vote on that and get rid of that term. But we do know that group practice is scalable. And when we build something bigger than ourselves, we imagine it getting easier. And yet group practice can actually end up feeling a lot harder than solo practice. Also, and I’ve heard this over and over and over again, the revolving door of employees is exhausting. I’ve seen this with my own group-practice-owning friends, when they have a therapist leave, but it can really feel like just when everything is going well, when everything’s coming together, you have a cohesive team, the money is working, you get a resignation letter or two and your stomach just drops. Thinking about that big hit to your revenue, all the resources that you spent on these therapists going down the drain, all of the time and energy it’s going to take to find and train someone new, not to mention actually filling their caseload after that. It’s also hard to take an actual break and set boundaries around your work. Sometimes your practice and your personal life can feel all bound up together. You think about your business all the time. You find yourself working evenings and weekends. You can’t imagine being able to take a vacation and really walk away from it because you know that something would come up and you’d have to jump back into your group. Your business is deeply part of you and that can be lovely. But also sometimes it’s a bit much. And finally, to top it all off – and on your worst days, this can really feel like insult to injury for all of this work you’re doing – you are definitely not being paid like a boss or CEO. You might still be relying on your own client income in order to be paid well, or you might be getting paid last and making even less money than you used to make when you worked full-time in client-facing work. 

 

Either way, when you think about all the work you do and the hours you put in, you shudder to think of how much you’re being paid an hour to run your group practice. These are numbers you’d rather not know. And I will say I’ve met several group practice owners where the answer to that is actually zero. They’re not being paid at all. So they’re being paid from the client income that they’re generating, but they’re not actually getting paid for all of that other work that we just talked about. Basically, they’re doing that in a volunteer role functionally, and the ups and downs of group practice, like those days that you feel good and proud and everything’s amazing, and then the resignation letter and the type money and the like, exhaustion. They can just come one after another. The good moments and the good days can be immediately followed by something bad happening. 

 

Your practice can often feel like an emotional and financial rollercoaster, which is not at all what you were going for when you set out building it. So I think many of us can agree, but maybe not all of us, that roller coasters are fun for an afternoon once or twice a year, but they’re not for your business and livelihood. I personally enjoy centrifugal force rides, which is a bit of a controversial opinion. The rides that spin you and, you know, like use the force. So flying saucers were on the outside, spinning cups, that kind of thing. And that is fun for a little bit, but I definitely wouldn’t want to do that for more than like 2 hours once a year. Rather than a roller coaster, what you’re looking for in your group practice, would be more like a luxury train car – if we want to keep going with the vehicle metaphors – a train car rolling steadily along the tracks, confidently headed to all the right places at the right pace, and also with a nice dining car and fancy drinks and snacks. Obviously, I know that you want to feel a sense of stability and safety in your group practice, knowing that the money’s going to be there. You want to feel proud of running a group that really reflects your values, takes care of your team members, and has a positive lasting impact on your community. You want to feel less like you’re playing a game of whack-a-mole all the time. Moving from one crisis to the next, and more like you’re competently steering your group practice ship. Weathering the natural ebbs and flows of business, including therapist resignations, with confidence and with ease. You want to be the empowered CEO of your group practice with a confidence and the paycheck to reflect the leadership and the vision that you’re bringing to the table every day. 

 

This practice was born out of your brilliance and your vision, and I want you to really connect with that. This wouldn’t be here if not for you dreaming it and making it happen. And you want to enjoy that rather than dipping in and out of owner’s remorse. And you can have all of this by strategically setting up your group practice finances so that your practice is healthy and sustainable and allows you and your team to thrive. When you started a group practice, you stepped into a higher level of business complexity than you had when you were a solo practitioner. There are so many moving parts that will make or break the financial health of your group practice. But so often, those decisions that you make on the fly while you’re building your group are the key elements that are determining if your practice finances work or if they don’t. I like to think of a group practice like a machine, and it’s one that you’ve built, but you might not have realized all the different parts and how they worked when you were building it. All the moving parts of group practice come together to shape the end results. How much money will be there at the end of the month, how much you and your team can get paid, whether you can afford employee benefits to take care of and retain your team, whether you can save up for your group practice, visions, and dreams. 

 

You’ve built your practice in a certain way and it’s going to give you certain financial results because of that. Things like the fees you set for your therapists’ sessions, your income splits or wages that you’ve set up with them, the operating expenses that you’ve taken on, your admin team wages, your client policies and how well they’re enforced, your training policies, the benefits that you offer. All of these things come together to create financial results. And if you’re like most group practice owners, you don’t fully understand that machine yet or how to fix it to make it give you the results that you want. In fact, if you set your machine up wrong, no matter how many clients your therapists see, you will never have the financial stability that you’re looking for. Which I know is like ugh. 

 

This is why, despite what we tend to think – and the solution that good practice owners tend to go for when they’re thinking about this problem – hiring more therapists is not the solution. It’s easy to just think – and I’ve seen group practice owners do this time and time again – I’ll just hire a couple more therapists and then everything’s going to be okay. And it might be true in your case. But also, unless you know that you’ve set your numbers up so your practice is actually designed to work and designed to be profitable for you and have money going to all the right places, then you’re actually just guessing at what the solution is. It’s our tendency, and we’ve talked about this many times on the Money Skills for Therapy podcast. It’s our tendency to always think that more is better. But having taught finances to hundreds of therapists, now I can tell you that more is more, but when we don’t have our businesses set up properly, more money coming in the door doesn’t mean it’s going to stick around or do what you need it to do for you. You need to fix your machine for that to happen. 

 

The good news is your machine is totally fixable and you can learn how to make it into a financially stable practice that pays you well, that practice that you were dreaming of when you started out. And I would love to help you do that. Money Skills for Group Practice Owners is about taking you from feeling like an overworked, stressed, underpaid group practice owner to being the confident and empowered financial leader of your group practice. 

 

The application window is open right now for Money Skills for Group Practice Owners for our January 2024 cohort. If you are hearing this, it means that this is your chance to apply to join me in January to work together for six months to help you become the empowered financial leader of your group practice. Click on the link in the show notes to learn more and to apply today.  

 

Thanks for listening today. 

Hi, I'm Linzy

Hi, I'm Linzy

I’m a therapist in private practice, and a the creator of Money Skills for Therapists. I help therapists and health practitioners in private practice feel calm and in control of their finances.

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