WP100 | 10 Most Common Money Leaks in Your Private Practice
Whitney Owens celebrates her 100th episode of The Wise Practice Podcast with a must-listen conversation about one of the most crucial topics for private practice owners: money leaks. Running a practice requires more than clinical skills—it demands solid financial management. In this special episode, Whitney dives into the top 10 money leaks that could be silently draining your profitability and offers actionable advice on how to plug them. From knowing your numbers to avoiding overspending on rent and unproductive marketing investments, Whitney provides invaluable insights to help you build a thriving, financially healthy practice.
10 Money Leaks Draining Your Private Practice’s Profitability
Many therapists struggle with financial pitfalls that could be avoided. From not knowing their numbers to ineffective marketing, these money leaks can significantly impact profitability. Let's dive into the top 10 money leaks that may be draining your practice's finances and how to plug them for good.
1. Not Knowing Your Numbers
One of the biggest mistakes you can make in your practice is not knowing your numbers. Whether it’s the number of calls, conversions, or income, if you can’t track these metrics, you’re essentially flying blind. Numbers are everything, especially as your practice grows and you become less involved in day-to-day operations. Failing to track inquiries, for instance, can lead to missed opportunities and revenue loss. Take the time to establish systems for tracking your intake process, and regularly review your conversion rates. For private pay practices, aim for a 30-50% conversion rate, while insurance-based practices should target 70-80%. Knowing your numbers is the first step to fixing the leaks.
2. Overspending on Expenses
Expenses are a necessary part of running a practice, but are you overspending? Many therapists make the mistake of buying or leasing more space than they actually need, with plans to grow into it. This can be a significant financial burden if the growth doesn’t materialize as expected. Your rent or mortgage should ideally be 6-8% of your revenue. Avoid projecting future earnings when making such decisions and base your spending on your current revenue.
3. Rent
A significant money leak for many private practices is overspending on rent or mortgage. While it’s important to have a comfortable and welcoming office space, many therapists make the mistake of leasing or purchasing more space than they actually need, hoping to grow into it. This can be risky, especially when growth isn't guaranteed. Instead, base your office space decisions on your current revenue rather than projected income. Ideally, your rent or mortgage should only take up 6-8% of your monthly revenue. If you're willing to take a small risk, you could push it up to 10%, but going beyond that can strain your finances. Also, be sure to maximize the space you already have to avoid unnecessary expenses.
4. Unproductive Marketing
Investments Marketing is essential, but many therapists throw money at strategies that don’t yield results. Whether it's paying for a table at an event or investing in a magazine ad, if it’s not bringing clients in the door, it's wasted money. Focus on what works. For many practices, SEO is a strong performer, driving a significant portion of new clients. Track your marketing efforts meticulously to ensure that you’re spending wisely.
5. Not Hiring Administrative Staff
This may seem counterintuitive, but not hiring administrative staff can cost you money. As a solo practitioner seeing 20 clients a week, you might struggle to respond to new inquiries promptly. Without someone to manage calls and emails, potential clients may move on to another therapist who answers more quickly. Having an admin staff can increase your conversion rates and free up your time to focus on clients. However, be mindful of how much you pay them. A good rule of thumb is to allocate around 5% of your revenue for administrative staff, but no more than 10%.
6. Paying Clinicians Too Much
For group practices, overpaying your clinicians can be a major financial drain. It’s essential to strike a balance between fair compensation and keeping your practice profitable. For 1099 contractors, don’t pay more than 60% of revenue. For W2 employees, aim for around 40%. Remember, your practice needs to generate profit to survive, and you’re taking on the risks and responsibilities as the business owner.
7. Underpricing Your Services
Your session rates need to reflect your expertise, location, and market demand. Many therapists undervalue their services, which leads to leaving money on the table. Regular rate increases are crucial—just like your hairdresser raises their prices, so should you. If you run a group practice, make sure your rate is higher than your employees' to prioritize filling their caseloads first.
8. Inconsistent Caseloads
Maintaining a full caseload is vital for both solo and group practice owners. Losing clients after you’ve invested time and money into attracting them is one of the biggest money leaks. Continuously monitor your client retention strategies and aim to keep your caseload as full as possible.
9. Clinician Turnover
High clinician turnover can drain your practice’s resources. Recruiting, hiring, and training new clinicians takes time and money. Ensuring your clinicians are satisfied with their pay, workload, and work environment is crucial for retaining talent and preventing turnover costs.
10. Unnecessary Business Consulting
While business consulting can be invaluable, over-reliance on expensive consultants without implementing their advice can become a financial leak. Be strategic about the consulting services you invest in and ensure that the insights you gain lead to actionable improvements in your practice.
By addressing these 10 money leaks, you can tighten up your financial practices, improve profitability, and ensure the long-term success of your private practice. Don’t let these avoidable mistakes drain your resources—be proactive, track your numbers, and make smart financial decisions.
Show Sponsor Arc Integrated
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Visit www.arcintegrated.com/coaching to schedule a free leadership consultation. You'll have the chance to receive some tangible strategies to help drive the success of your practice.
Show Sponsor TherapyFlow
Struggling to market your therapy practice? You’re not alone. Most practice owners prefer focusing on clients and practice growth, rather than marketing. That’s where TherapyFlow comes in. They specialize in done-for-you marketing for solo and group practice owners. Therapy flow has helped thousands of practice owners attract new clients. Ready to grow? Visit mytherapyflow.com to book your free marketing consultation today!
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Leading a group practice is not easy. We did not go to school to learn about business or really leadership skills. We went to become therapists. So as you grow your group practice, it's hard to know where to go to learn more about being a good leader. Years ago, my practice felt out of control for me. I had six to eight therapists.
I wasn't really sure what leadership roles I needed, what my policies and procedures were. And I was scared to communicate because I didn't know what my therapist would say to me and I wasn't sure how to communicate effectively with them. That was when I reached out to ARC Integrated and began my coaching package with Michael Dietrich Chastain.
Then I learned how to appropriately communicate with my therapist. I began to understand what was happening within me that was making me so nervous about those conversations. I began to put policies and procedures in place that brought structure and organization to the practice. And I was able to put therapists in leadership roles so that the pressure wasn't all on me.
Looking back at my work with Michael, I see that I was changed, and the practice changed, and we started on a trajectory of growth and success. In fact, my practice is double the size now from what it was then, and I adhere a lot of that to my work with Michael, because it helped me become a better leader and more confident in my skills.
So if you're a group practice center or organizational leader, and you're looking to grow your skills, Understand yourself better, bring more team cohesion and retain your employees. I encourage you to reach out by going to arcintegrated. com slash coaching. Let Michael know you heard about him from me on the wise practice podcast.
And he would love to work with you. In fact, if you head to arcintegrated. com slash coaching, you can schedule a free leadership consultation. I know when I did my free consultation, I learned tons and you will too. Hi, I'm Whitney Owens. I'm a group practice owner and faith based practice consultant. And I'm here to tell you that you can have it all.
Want to grow your practice? Want to grow your faith? Want to enjoy your life outside of work? You've come to the right place. Each week on the Wise Practice Podcast, I will give you the action steps to have a successful faith based practice while also having a good time. Now let's get started.
Well, she grows your practice.
She don't play. She does business with a twist of faith. It's Whitney Owens and the Wise Practice Podcast. Whitney Owens and the Wise Practice Podcast.
Hello friends, and thanks for hanging out with me today on the Wise Practice Podcast. I'm so glad you're here. This is a special episode because it is episode 100. It's a milestone. I do think as business owners, we are on such the go go That we don't stop and celebrate. So I'm going to take a moment and say, yay, episode 100.
And the truth is, if you were not listening to the show, there would not be a show. So I celebrate you too. And I appreciate that you take the time to listen to the show because there's a lot of other things you could listen to. And so it means a lot to me. So episode 100. Here we are, and I'm going to make it a really great episode for you full of some of the best content that I give.
In fact, when I was thinking about what could I give to you as we celebrate this moment, I thought the, one of the best webinars I ever did was about money leaks in private practice. And hey, if I can provide you value and save you money, what better thing can I give to you? So I feel certain. That you will walk away with at least one way to change your practice to make more income by the end of this episode.
Hopefully 10 ways, right? So make sure that if you're listening to this audio while you're running or in the car or on the go, go back and look at the show notes so you can catch all the information and put it into practice. So one of the other reasons I was thinking about recording this episode is I consistently hear from practice owners, well, he said they're losing money.
And of course, I don't think that anyone is like, Oh, I'm going to make this decision and lose money. No one is thinking that, but I'm amazed how many people make these decisions. I think a lot of it comes from just not having the education, right? Not having, A consultant or someone to kind of guide them along the way.
A lot of people will take advice from other practice centers in their area that might not really know that they've had to kind of bootstrap it or. You know, put the plane together while they're flying it too. And so then we're getting information from people who don't have all the information. So that's not really a good situation to be in, right?
Is that I want to help you figure out what we do and don't need to be. And I'm going to tell you what the most common mistakes are within each part of this. So this episode is a solo show and I'm going to go through the 10. Most common money leaks in your private practice. Now, when I talking about money leaks, I am talking about those things that people are doing that are losing money in their private practice.
Right? So not everyone is going to pertain to you, of course, but I think some of them will. And I think that you're going to get a lot of value from this. So I'm going to go ahead and jump right in to number one, for what I'd see for the most common ways that people are losing money in their practice.
It's. Something, but not at the same time. So it's knowing your numbers, right? I am amazed when I get on calls when consulting clients. And I say, Hey, tell me your numbers and they don't know what they are, right? If you don't have the numbers, you don't have the data. So people will try to explain to me, Oh, you know, I have about this many calls or about this many conversions, or I make around this amount of money.
You know, if you can't show me in writing or in a way that you're tracking your data that you actually have that, then how do we know that that's true? Right. And so when I'm talking about tracking your numbers, numbers are everything in your practice. This is particularly important for group practice owners, because.
As your practice is growing, you're getting less and less involved in what's going on within the business. And if you don't have the ability to go and look at how many calls are going, coming in, I'm using calls as an example here. So looking at your calls, then you're not really going to know, right? So within this idea of tracking numbers, I want to take just a moment because I didn't make this a specific part of the tip, but it's important to know that a lot of money gets lost on tracking calls.
I've done lots of podcasts, webinars on this topic, because I believe that the calls, and when I say calls, I mean inquiries, that could be people filling out your contact form, pulling requests, emails, whatever. New inquiries is where so many practices are losing money. They're not converting them appropriately.
And so what I see people sometimes doing is, hey, I'm gonna, I don't have enough clients, right? Makes sense. A lot of us want more clients. And so I'm going to invest in Google ads. Okay. Now, Google ads is great. I've done Google ads in my practice when I needed to fill up some therapists. There was a moment where I hired three people in a three month period.
And let me tell you, I did some Google ads, but the problem is people do Google ads. And then when clients reach out, they don't convert. So you've really wasted your money because you're not converting them. So you want to make sure that your conversion rates are in an appropriate place. And we're talking about conversion rates for a private paid practice.
We want that number to be around 30 to 50%. I truly, when I'm working with consulting clients, I want it at 50%. Okay. And that's a big part of what I do in consulting is teaching them how to convert those. And the way we talk about insurance, the way we talk about private practice. I did have an episode on the podcast, um, that can be linked in with.
Kate and Katie, where we talk about, um, from the practice exchange, where we talk about private practice startup, excuse me there, where we talk about converting calls. That was a really great podcast episode. If you want to go back and listen to that, that'll give you a lot more of these details, but private pay, we want 30 to 50 percent for insurance based, we want 70 to 80 percent conversion.
That means every person that calls 80 percent of them are converting into a new client, right? So if you aren't at those percentage percentages yet, we'd Those numbers that you're tracking, I want you to go back and work on that process because if you start putting money into your Google ads and you're only converting at 20 or 30 percent, you're wasting money.
But if you could increase your conversions by getting some education and knowledge about tracking, you're going to make money and you're really not spending much. Because you're just working on your process. So if you have more questions about that, WISePractice community is here for that. If you want to go take a deep dive into your numbers and how do I track them with dashboards and things, that's what the WISePractice community is for.
So shoot me an email, Whitney at WISePracticeConsulting. com. I'm happy to get you connected in that way, but knowing your numbers with your intake process is so important. You also need to know your numbers with. Lots of other things that we're going to kind of go into here and I'm going to use a lot of numbers because I like numbers in my practice, but you also need to know your budget and things to that nature.
So, the first money leak is just simply not know your numbers, not tracking them in your private practice. All right, the next one is your expenses. Therapists are spending too much money on lots of things. Okay, this is, there's a variety of reasons for this. I think some of it is just not having the business acumen that we need and understanding how what we need to be spending money on what we don't.
I see some therapists that are looking for something to fix everything and so they look at some software or some product and they spend the money on it hoping it's going to fix their problem when really it's not the thing that they need to be spending their time money on. And look, everybody wants to sell you something.
Everyone's going to tell you that the product is good, right? That's not always going to be the case. So be very mindful of that. So within numbers, I love using Profit First for my budgeting. Super helpful. Highly recommend Profit First for Therapists by Julie Ayers from Greenoka County. Great book. And when I have used Profit First in my practice, it helps me know where my money's going and how to spend it appropriately.
It also shows me, hey, I've got this extra, so I can spend money on this. Or, hey, I'm not doing great right here, so I need to not be spending money on that, right? So, ideally with expenses, you would like your overall expenses to be between 15 and 20 percent of your total revenue for your private practice.
This is a little bit more for like solo practice centers can be more in the 20 percent range. As your practice grows, that percentage should decrease, which makes sense because your total revenue is increasing, so technically more money is going towards it, just a smaller percentage, because as your practice grows and you, if you were to start a group practice, your expenses is going to decrease and your percentage for payroll will increase.
Okay, so you want it to be 15, 12 percent when you're looking at your group practice. I actually have mine at about 12%. So I encourage you take your expenses and go through it. Look at what your total percentage is for your monthly or maybe every two weeks. I think monthly is better because rent ends up coming through expenses and that ends up being a higher number and make sure that you're sitting in that right percentage.
And if you're not start figuring out how you can cut that cost so that you can be in a better place financially. All right. Another big leak in money at your private practice is rent or mortgage. I see a lot of therapists spending too much money on their office space makes sense. We want to have a space for people to be comfortable to come into that we love, or we have on a certain location, or we think therapists, or we think clients won't come.
What I also see as a mistake is private practices purchase more space, and it could be purchase or lease, more space than what they actually need with a plan to grow. This is a huge mistake because you don't know yet if you're really going to grow. I'd like to think we're all going to grow, right? But there's no guarantees here.
So purchase space based on what your actual revenue is, not based on a projected revenue. When I was looking to purchase the building, so I have my current space that I rent, I have two buildings that are right beside each other, so I have a couple of different rents that I pay. And then when I was looking to purchase the building that I'm building out on Wilmington Island, I went to my accountant and I said, hey, I want you to run these numbers.
I want to make sure that this is, percentage wise, working for me. And it was, with what I actually have right now. So not including any revenue that's coming from the new office. Now, your monthly rent or mortgage needs to be around 6 to 8 percent of what you bring into your practice. I know that sounds really loud, but it's true.
And so don't go overspend on your rent. Now, I would say, if you want to be a little risky, you could go up to 10 percent and I would not exceed 10%. But ideally, you want to go to that 6 to 8%. Okay. Another thing that's important when we're looking at space. That's a money leak. It's that people aren't maximizing their space.
So it could be that you're a solo practice owner and you really only need three days a week and then you go rent your own office, right? Maybe you should rent from somebody else, sublet, until you grow. Or maybe you should do virtual and work from home. Or maybe I know one practice owner who goes to the office one day a week and then does the rest of his sessions from home.
Whatever it is to save that rent income until your caseload grows. Or maybe you want to get office space and rent it out a couple of days a week. So maybe you're a solid practice owner, you use it four days a week, but you could rent it out one day or two days a week. For group practice owners, I often see people feeling the need to give each therapist their own office.
This is not a good situation unless every single therapist is working completely full time, which is usually not the case. And I still don't think it's a great idea even in that situation because you still have time that the office could be used. An office can be used for 12 hours a day from 8 in the morning to 8 at night, or 9 in the morning to 9 at night.
It can be used on the weekends as well. So make sure you're maximizing that space. We have our therapists on a block schedule within our group practice. And so they have to use those blocks to be able to maximize their time. Prior to that, people would kind of work the hours they wanted, like 10 to 6.
Well, yeah, 10 to 6 sounds great. But then we lose those 8 to 10 and the 6 to 8 hours, right? No therapist is going to come in at six o'clock and see two clients. So we had to move that around to be able to maximize our office space while we're expanding. Again, this is something that I cover in the WIATS practice community.
In fact, I just put a presentation together that we're going to be doing in a couple of weeks on purchasing and leasing space and how I do the block scheduling with my great practice. So that's the second, I mean, sorry, that is the third money leak is rent. Okay. In mortgage losing money in that way.
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Okay, the fourth one is marketing. Therapists are losing money on their private practice and how they spend it on marketing. So some of that goes to what I was talking about earlier, putting money into marketing, but they're not converting things, right? I think a lot of times something sounds like a good idea.
So, oh, that would be really cool to have a table at that event or to have that advertisement on that program or that radio show, or that'd be cool to have a YouTube channel. Yeah, all those things sound really cool, but if they're not actually producing income or getting clients in the door, then you're wasting money.
And that goes back to knowing your numbers. Everything you do in your marketing, you should be tracking it. And the way you're going to do that is when people reach out for your therapy, you're tracking how they heard about you. Right. We don't want to just track, Hey, you know, people heard about the practice because I went to this thing, even though that's good, but if they don't convert into a client really didn't make any money off of it.
So, you want to make sure that you're at least making some clients have a situation. Now, sometimes it does take some time and building relationship for that to happen, but you may need to be careful about how much money you're putting into these things. If they're not a direct outcome of clients. My, one of my biggest mistakes that I made was I wanted to be in the Savannah magazine.
That's a magazine that goes out into all the doctor's offices in town. And once a year, they do a special edition of healthcare. So they reach out to businesses, you pay to get in. Someone comes to your office, does a photo, like a professional photo shoot, and you answer questions about your area of expertise.
So when I had about five therapists, I think in my practice, I paid 800. Which it seemed like so much money at the time to do this marketing at within the Savannah magazine, and we didn't get any calls from that. Yeah, I mean, it wasn't productive at all. So I learned. Getting in those things doesn't really help.
I was in another magazine. It's like a, a local college magazine. I didn't have to pay to be in it because someone interviewed me on cognitive behavioral therapy, and I got two clients from that. So that was good. Now, would I have wanted to pay for that? No, but I was able to get clients from it. So it's worth it.
So I've learned that going to live events, speaking at things, Printed marketing. I usually don't get a lot of clients out of that. So I don't spend a lot of my money in town with that, but I do get a lot of clients from Google. SEO is where it's at. So I get about 60, 65 percent of our new clients come through Google.
So yes, I'm going to spend my money on SEO because that's the thing that's working in my practice. So found the things that are working. Like do I get clients from social media? Hardly ever with my private practice. So I don't spend a lot of time energy into the social media. So I do get some for my consulting business through social media.
And so I do put some for that, but not for my private practice. Most people are not going to social media to find a therapist. They're going to social media to have a good time, to scroll through, to numb their mind, or to get updated on things. When they're looking for a therapist, they're going on Google and figuring that out.
So the fourth one is money leaks, and your practice would be marketing. All right, the fifth money leak is paying too much for your administrative staff. And you know what? I'm gonna, I'm gonna change this. It's administrative staff in general. Okay, this is why. I do see some therapists that don't hire administrative staff and you're losing money.
What, Whitney? Yeah, you are. This is why. Because you're not getting back to potential clients fast enough. So think about the solo practice owner who's seeing 20 clients a week. Look, it's hard to get back to people, right? So people are calling, wanting to get in. You can't return their calls for at least a day or two.
Which isn't bad, but someone who's got a locked person answering calls are answering it immediately. So people are going through their list. They're scheduling with another therapist simply because you didn't answer the phone or you didn't respond to their email quick enough. And yes, you're going to get some referrals that way, and that's great.
But overall, you're going to end up losing people. So the amount of money you would pay for someone to pick up the phone, or email, or get someone scheduled, you're going to make more money because you're getting more people scheduled. And. The amount of money that you can make seeing one clients, let's say you have a self pay rate of 150 or maybe your insurance is even if the insurance company is paying you 80 if paying an admin 20 an hour, that's 4 hours.
Right, that's incredible. So that person can do 4 hours of work. Plus, for me, I've noticed that my staff that takes calls, they're better than me now. Their conversion rates are better because they are in it all the time. Right? So many therapists say to me, Oh, you know, they're not going to convert like I do, or I'm worried they're going to say the wrong thing or God, they're going to make the right fit.
Look, you can train them on all that. They can do it. If you get the right person in the role. So you're losing money by not having administrative staff. But on the flip side, making sure you're paying them appropriately is really important. You don't want to pay too much or you're going to be struggling with what you're doing.
A good rule of thumb for paying administrative staff is around five percent of what's coming into your practice. You could go up to 10 percent if you, if you want to. I don't think that's a terrible thing for someone that's doing a great job for you. I also like to think of it in this way. I don't like doing some things.
So am I willing to make a little bit less money so that I don't have to do that thing? 100%. You know, like if you're in a place where you can like make a little bit less so that you don't have to do things that you don't enjoy or things that take up a lot of your time. I know that's. Not something that everyone can do, but I think it's something to think about.
So, I hear a lot of therapists say they do not like social media. And first of all, social media, like we said, it's not really bringing you a lot of clients anyway, so it's not something you really need to focus on. But if it's something that you're wanting to have and you don't like doing it, then pay someone to do it, okay?
What's really important is that you're doing an email list, because email lists are a lot more likely to convert clients into social media. And so maybe you don't like writing emails, or you don't like writing or managing that, or something extra to remember, or maybe you don't like writing blocks. And let me tell you, it's important that you have blocks for SEM.
So maybe you stop writing blogs, you hire someone to write them for you and to post them. So maybe you make a little bit less, but now you're not spending two hours a week writing blogs. And then the hope would be you'd fill that time with clients because you really enjoy working with clients, right? All right.
So that was money leak number six. All right. The next one number, that was number five. Wow. I'm getting a bit all over the place. All right. Number six is clinician pay. So I see often a couple of mistakes here when it comes to client clinician pay. So these are your therapists if you have a group practice.
Number one is people pay the therapist too much. I can't tell you how much pushback I get when consulting from therapists who don't want to follow this rule. They think they'll never get a good therapist if they don't pay them a high salary or hourly rate. But the truth is, You will not make it as a business owner.
If your business does not have profit, you will not make it. And it's really important that your business makes it because you actually employ people and they want their jobs, right? So you can't blame therapists for wanting to ask for more money. Who doesn't want to ask for more money, but you've got to set some limits on what does and doesn't work for your practice.
I would encourage you with 1099s to make sure first of all that you're treating them like a 1099 and that that's a whole nother discussion that you don't treat them like a W 2. You never pay more than 60 percent to that clinician, okay, because if you do that you will not make money. Again, I knew a therapist that I was helping her get her private practice or her group practice started.
She didn't believe me. She went to her accountant, ran the numbers because she wanted to pay 70 percent and she was like, Oh my gosh, Whitney, if I did that, I would be losing money. I was like, yeah, is it really worth starting a group practice and losing money? Heard another practice center the other day.
This was the second time I'd ever heard someone pay 80%. This girl paid 80 percent and she said she couldn't pay herself anything and that all of her money was going towards payroll. And I'm like, yeah, so her. Income that she was paying herself. It was less than 10%. It was like five to 8 percent of the total revenue was what she was paying herself.
Y'all that's crazy. You have got to be paying yourself more. You work hard. Okay. That doesn't mean that you want your money or that you're some big millionaire or that you make so much more than everyone else. Okay. Or that you're any better. That, that doesn't mean that. I just think a lot of group practice owners.
feel guilty making money that you have worked and built this whole practice. You put the risk in, right? We still want to pay them well. We're still giving them a job. And the truth is, if the therapist is not happy with what they're making, they'll go somewhere else, right? You want to create a practice that works for you and your needs, and then you help other people join in your mission.
All right, so the 1099 do not go over 60%. Okay, if you are including supervision, you need to go even down to 50%. Okay, because supervision is expensive. And a lot of therapists don't calculate that for W2 employees. I encourage you to pay them around 40%. Because there is a lot that you're paying for the W 2.
A lot of people push me back on this, they say 50%, but I will tell you, I have seen practice owners pay 50%, and they are struggling to make payroll, they're not making profit in the business, and the practice owner is having to see a lot of clients because the money is coming from them seeing clients. You don't want to be in that situation because if the practice owner is distracted seeing a lot of clients, the business won't grow because you're the one who's helping it grow.
Okay, there's a lot of things that you can give to your employees. So, if you're paying them the 40 percent by the time you add in health insurance, retirement, paid time off, those things, you're really hitting more on the 45 percent level, right? And then you got to remember emergencies happen, right? You might have a time where you're having to pay an attorney to get involved from 1 of your team members.
Or maybe you own a building and something breaks. Like, you need to be putting that money aside to be able to cover those expenses. So don't overpay your clinical staff. All right, number seven, your clinical rates are too low. So you're losing money with their, when clients come in to see you. All right, make sure that your rate matches the area, your expertise, your years of working, right?
Another thing that's important is doing regular increases. Just like when I go get my hair done, my hair rate increases. It's not uncommon that a therapist's rate would increase. Maybe you got specialized in EMDR, or look, you've been in this private practice for this long, you should be increasing your rates.
You're better at what you do, right? Also, if you do start a group practice, the owner should have a higher rate than everyone else, because you want to fill the caseloads of those that work for you. So make sure that you're increasing your rates that you can really fill everyone else up. If you're an insurance based practice, every few years you should be writing letters to the insurance company requesting rate increases.
All right, the next one, number eight, is you're losing money because you're not maintaining a full caseload. This is for solo and group practice owners. One of the biggest money leaks is losing customers. You have spent so much time and energy to get them in the door, right? Your marketing efforts, your intake efforts, your website, all that money that you've dumped in.
If they don't come for a couple of sessions, you're really losing money in the long run. Right? And y'all intakes are a lot of work, emotionally, more taxing, the treatment plans, you're reaching out to parents, all those things. It's exhausting. So not only are you losing money, you're losing energy and time, right?
So make sure that you have good client retention. Okay. Client retention is client staying at your practice. Really industry standard is at least eight sessions. So I would encourage you to get at least 60 to 70 percent of your caseload to come for at least eight sessions, run those numbers, figure that out.
If you're not at that place, you need to look at why you're not at that place. Again, that's something that we teach in the WISePractice community, but flight retention is important. A product that I started using is Practice Vital. And it's a company that goes with your EHR. It's like a software that you can use.
And it tracks client retention in your practice. It's great. So I used to do that by hand. It took some time every month, but now it automatically does it for me, for all the therapists in my practice. It's been great. So we'll throw that link also in the show notes so that you can grab that. But I, I've literally loved using that software and I show it to my therapists.
And it shows me just like the demographics across the board for the whole practice and then for therapists. Another thing that's really important, especially if you're a group practice is have a minimum caseload. So you can kind of run the numbers and figure out where is that break even point. But sadly, I see a lot of group practice owners take part time therapists and let them see like four clients a week.
Look, if they're only seeing four clients a week, you're probably losing money on the table. Okay. By the time you've paid for their rent, Resources. Now, it would depend on if you're 10 99 or W2. You can get away with this a little bit better if you have your percentages correct with a 10 99 with a W2 employee.
You're paying the workman's comp, liability insurance, all their stuff. So by the time you've paid for all that, they only see a couple of clients. You're losing money. So I want you to think of that as a, as a loss, you, I would encourage you to either tell them to see more clients or tell them that this just isn't gonna work, right, because this is not worth losing money to hire somebody.
Okay, when I hire people, I let them know they have a minimum of 10 clients. If they can't meet that, that's their, they've chosen not to stay in the job. It's not that I fired them, really. I mean, they're choosing not to meet the requirements. Okay, now we're on number nine, which is clinician turnover. So this, it's obviously a group practice thing, but one of the greatest losses in your practice when a therapist leaves, then you might have, there's so many different ways that people do this, but basically if the therapist leaves, you're going to lose clients.
Okay. Even if you allow them to take their clients and then go start their own practice, then yeah, you're really going to lose a lot of clients or maybe you don't let them take them. But even if you don't, or maybe they're going to a job where clients don't follow, you're naturally going to lose clients in the process, right?
Some of them might stay, some of them might see another therapist, but most of the time they don't. And the money that you spend getting another good hire, I mean, it is hard to find good therapists in your practice. So there's all that money too in the hiring process. Also, your time and energy that goes into hiring, you could have spent it doing something else.
So you're losing a lot of money in that way. So I encourage you to take some steps to really work on culture in your practice, because I think that is the number one reason why therapists stay at a practice. Look, if you want to make a lot of money, go work in an agency down the street, right? Or go do your own private practice if you want to.
But here we're providing you with a great culture. We're doing a lot of things for you on the front end so that you can relax and providing you great benefits. So client clinician turnover, make sure that you're making some efforts in that. All right, and number 10 is not getting business consulting.
Look, you don't know what you don't know. And so having a business consultant will help find all these money leaks. All these that I just went through, I could have said so much more about each one. And it's really hard for me to know the ins and outs without looking at your numbers, without talking about the way you're talking on calls, without looking at your practice and your money, your money leaks.
So when you have business consulting, you have someone one on one working with you, looking at your practice, helping you along the way. I have invested in business consulting multiple times in my career, and yeah, am I nervous every time I put that money down or I sign that contract? 100%. Because it's a big investment, but I can hands down tell you, I've never looked back and said, I shouldn't have made that financial investment.
Right? Most of the people that I have worked with in consulting look back and say, I made more money because I did that consulting. Right? Here's this mistake. I prevented and I'm always so heartbroken when I get an email from a practice owner, and I'm just like, wow, if we had just done some business consulting 6 months ago, you would have saved all these headaches.
Heartbreak, money losses, all the things. Okay. So I'm going to tell you to work with me because you're listening to the podcast and I would love to have you in the last practice community, but look, there's lots of great consultants out there. So find one that fits your needs, specifically what you want to work on here.
We do business consulting. This whole podcast has been very business, but we're faith based. So we're going to have that Christian perspective at WisePractice that you might not get in some other situations if that's something that you're looking for. Within the WisePractice community, we have so many different ways for you to get involved in business consulting.
And I know that money can be hard sometimes. That's the whole reason we're doing this episode. So we want to provide multiple ways for you to get involved. We've got the Wise Practice membership community. I've talked about that many times today in this episode. I have a course on almost every single one of these money leaks that you could go and watch and learn all the details and how to fix it in your practice.
That community is 89 a month. The doors aren't open right now. We open them twice a year. So I'm looking at the beginning of 2025. So be checking your email. If you're not on my email list, head to wisepractisconsulting. com. Grab that opt in for four ways to market and network with churches that'll get you on the email list.
Or just shoot me an email, Whitney at wisepractisconsulting. com. If you're interested in the membership community, I'd love to talk to you more about it. But we do open those doors twice a year. So that is the lowest cost way to get involved. I mean, obviously you're listening to the podcast. So that also gets you involved in being on my email list.
Both are totally free to get advice and help in your business. But I would say join the membership community. If you want to have less money leaks in your practice and connect to other faith based practice centers, we also do launch mastermind groups throughout the year. If you go to the last practice consulting website, I believe it's under services.
You can see the membership community information and masterminds that we're running. So make sure that you check that out. If you're wanting to grow your practice, I'm looking at launching a mastermind group in the coming weeks for group practice owners, actually. So working on systems processes in your practice.
So if you're a group practice owner interested in that, shoot me an email, Whitney, lastpracticeconsulting. com. Also, one of our other consultants, David will be running a mastermind for advanced practice owners. on how to grow your income without growing your caseload. So if that's something you're interested in, you can email him at david at wisepracticeconsulting.
com and he can get you connected to that group. So there are ways to get involved. And then along with the mastermind groups, we have individual consulting. We have a couple of different consultants within the last practice community. And so you can head to the website, westpractisconsulting. com, go and fill out an application.
We will follow up with you. If you're not really sure mastermind, individual, the membership, maybe you don't know where you fit in. That is totally fine. Go ahead and complete an application. One of us will jump on a call with you, talk about your practice, listen to what's going on and give you a recommendation.
But please don't do it on your own. That's when mistakes happen and you lose money. We have made the mistakes we have learned. We have done the work. We want to help you get there. So thank you for listening to this episode. Again, head to the show notes for more information. We'll throw the application in there for working with us.
You can go to WISePracticeConsulting. com to learn more. And thank you again for being a listener of this podcast and for celebrating episode 108 today.
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Podcast. Special thanks to Marty Altman for the music in this podcast. The wise practice podcast is part of the site craft podcast network, a collaboration of independent podcasters focused on helping people live more meaningful and productive lives to learn more about the other amazing podcasts in the network head on over to site craft network dot com.
The wise practice podcast represents the opinions of Whitney Owens and her guests. This podcast is for educational purposes only, and the content should not be taken as legal advice. If you have legal questions, please consult an attorney.
