WP103 | How the Transition from a 1099 to W2 Model Changed my Practice - Podcast Takeover with Amy Dover
Amy Dover takes over the Wise Practice Podcast to discuss her experience transitioning from a 1099 contractor model to a W2 employee model in her private practice. She shares her journey, including the legal and financial considerations, the challenges she faced, and the resulting changes in her practice’s culture and operations. Amy emphasizes the importance of consulting, the benefits of the new model, and how her faith has guided her through this significant change, encouraging other practice owners to carefully consider their own business models.
Navigating the Transition from 1099 to W2
Amy shares an intimate and powerful narrative about the transformation her private practice has undergone. It’s a story marked by faith, challenges, and growth, centered around one significant change: the shift from a 1099 contractor model to a W2 employee model.
For Amy, this transition has been nothing short of monumental. She openly admits that the dust has yet to settle, but she is clear on a few things from the start: God is good, she has no regrets, and consulting has been pivotal in making it all possible.
Amy emphasizes that this change was necessary for her practice, despite it being the most challenging year she’s faced so far. “God is so good,” she says, “He has been here every step of the way with me. This change needed to happen, and I have no regrets.”
What made the difference for Amy during this period was the guidance of a consultant. Working with Whitney, she was able to navigate the complexities of transitioning her practice from 1099 contractors to W2 employees. She encourages others to seek consulting if they are considering a similar move, stating, “I could not have done this without having a consultant walking with me and giving me encouragement and guidance along the way.”
From Humble Beginnings to Rapid Growth
Amy’s journey started in January 2015 with no grand plans to grow into a group practice. But within just three months, she was hiring her first therapist, and every six months thereafter, she found herself adding more team members.
However, the early years were a whirlwind of growth and decision-making. Amy admits she didn’t know what she was doing at the time. Like many private practice owners, she made decisions on the fly, did limited research, and simply relied on her instincts.
Despite the challenges, Amy’s practice flourished. She quickly gained a strong reputation in the community, and therapists began reaching out to her, eager to join her team. “I was running a private practice that no one had ever really experienced working at before,” she shares, noting that her generosity and commitment to her team helped her retain long-term staff.
The Need for Change
As Amy entered the eighth year of her practice, she felt a sense that something needed to change. There was an underlying unease she couldn’t shake. This feeling led her to seek consulting, originally with the goal of opening a second location. But through the consulting process, her desires shifted, and she realized that a transition to a W2 employment model was the right move for her practice.
1099 vs. W2: Weighing the Options
One of the key takeaways from Amy’s journey is her newfound passion for helping other practice owners understand the differences between 1099 and W2 employment models. As someone who started with 1099 contractors, because it was the only way she knew, she now recognizes the importance of making an informed choice.
With a 1099 model, there is flexibility and independence for both the practice and the contractors, and the tax burden is lower. However, this model also limits the practice owner’s control over how work is performed and doesn’t require providing benefits to contractors.
On the other hand, a W2 model offers increased control and consistency in the work environment. It allows practice owners to have a more hands-on approach to daily operations, but it also comes with extra responsibilities, such as higher taxes and the need to provide benefits to employees.
Amy’s experience has shown her the importance of setting clear boundaries from the start, no matter which model a practice owner chooses. “So many practice owners don’t know what we’re doing, and we just do what other professionals did,” she says. But that approach can lead to mistakes and missed opportunities.
The Transition Process
Amy’s transition from 1099 to W2 was not easy, but she remained committed to making it work. She shares the steps she took to prepare for the transition, implement the change, and navigate the challenges that followed.
One of the biggest lessons Amy has learned is the importance of relying on faith and trusting in God’s plan. She emphasizes that God has been with her every step of the way, providing guidance, support, and the strength to keep going, even when the path has been difficult.
Understanding the Difference Between 1099 and W-2
Meeting with a Christian attorney and accountant, Amy began to grasp the legal implications of her practice's structure. The distinction between a 1099 contractor and a W-2 employee goes beyond just tax classifications. A 1099 contractor operates with more independence and less oversight, while a W-2 employee is integrated into the business, receiving benefits and working under the business’s policies and procedures.
For Amy, this realization was pivotal. Operating under a 1099 model while expecting her therapists to comply with W-2 style oversight, such as detailed documentation and regular meetings, was not just risky—it was non-compliant. Amy knew she had to make a decision. She couldn’t continue with the same model after becoming aware of these discrepancies, feeling that it would hinder the growth and blessing of her practice.
A Test of Leadership
The transition from a 1099 to a W-2 model was neither quick nor easy. Amy had to evaluate everything from employment contracts to benefits packages and even consider changing the name of her practice. She consulted extensively with her attorney, accountant, and a business consultant to ensure every legal and financial detail was in order.
Announcing the change to her team was one of the most challenging parts of the process. While she hoped her team would see the value in the new model, the reaction was mixed. Some therapists appreciated the stability and benefits of becoming W-2 employees, but others resisted the change. One therapist even left to start her own practice, and unfortunately, didn’t depart on good terms.
The hardest part for Amy was managing the fear of change among her staff. As therapists, they were used to helping clients navigate change, but when faced with it themselves, the resistance was palpable. Amy’s leadership was put to the test as she worked to reassure her team that the transition was not only necessary but would ultimately benefit everyone involved.
Conclusion
For other practice owners considering a similar transition, Amy offers this advice: make your decision early, be thorough in your research, and surround yourself with a strong support team. The journey may be tough, but ensuring compliance and fostering a positive workplace culture will pay off in the long run.
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com Use the coupon code WHITNEYOWENS at checkout and get 20 percent off your first month. That's Whitney Owens for 20 percent off your first month. 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
[00:00:58] Jingle: where 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 wise practice podcast.
[00:01:17] Amy Dover: Hello friends, and welcome to the wise practice podcast. Thank you again for joining me. My name is Amy Dover. Bye for now. I'm a faith based practice owner in Alabama, a group practice owner, and a WISE Practice Consultant with Whitney Owens and David Sturgis. This is the third episode of the October podcast takeover that Whitney has so graciously allowed me to do.
And let me just tell you guys, it's, it's not easy doing podcasts. I really thought that I would just be able to just kind of step into this. Put together this great outline and just go for it. And this has taken some time and effort and intention. And for those of you who are already doing podcasts, shout out to you.
You are awesome. Thank you for doing it. Keep it up, keep putting out that great content. And for those of you that are thinking of it, just know that it's a lot more work than it looks like. But I have enjoyed it and this, this is the third episode of four that I'm doing and today's episode is actually the most personal one for me.
So I'm excited to, to dive into it today. Um, but I will go ahead and tell you upfront, um, I'm probably going to be a little more vulnerable than I have in the other two episodes that I've done. And this is a, this is an episode that's very close to me right now because I'm still in the middle of transition.
So today is all about how the transition. From a 1099 practice to a W 2 practice changed my practice. And like I said, I'm still waiting for the dust to settle on this transition, but let me start out by saying, God is so good. He has been here every step of the way with me. This change needed to happen and I have no regrets.
And third, I cannot tell you enough how much, um, consulting has been pivotal for me in this. I worked with Whitney at the end of last year to make this transition happen. The transition actually occurred as of March 1st in my practice. But as I get into the podcast, you'll kind of hear some more details about how the year has unfolded.
But those are three big things I just want to say from the get go. God is good. He led me to do this, and he has not abandoned me, even though it has been the most difficult year so far in my practice, and second, no regrets. I would do it again. Third, consulting. So important. If you are on the fence about whether or not you want to do it, I definitely encourage you to do it.
I could not have done this without having a consultant walking with me and giving me encouragement and guidance along the way. So let me start out, I told you guys a brief history of my practice already and, but I want to walk you through it a little bit more because it will set the stage for just how momentous this, this transition has been for my practice.
I opened in January of 2015 and it was just me for about three months. I had no plans to grow into a group, was not thinking that way at all, but I experienced just Exponential growth from the get go. I was working in a pediatric office. That's where I was running space at the time. The doctors and the nursing staff were absolutely wonderful to me.
And I grew so fast and within 3 months, I was hiring my 1st person and then 6 months down the road, I hired my 2nd therapist. And then, but every 6 months, I was hiring someone and. Guys, I didn't know what I was doing. So mind you, this was early 2015. It, I'm sure that coaches and consultants were out there.
Of course they were, but I did not know anything about that. So it was definitely, I didn't know what I didn't know. I still managed to make decent business decisions, even though I knew I was really kind of working behind the eight ball and chasing my tail with a lot of it. There was so much that I didn't know and it overwhelmed me at times, but I also knew that.
God knew my heart. God knew my motivations. He was providing me with really great mentors, really great resources. I just didn't know at the time anything about coaching and consulting. So I did a lot of, a lot of what most of us do when we don't know. I just kind of made decisions on the fly. I did just a little bit of research.
I didn't go into in depth about anything. I started out by hiring my friends, which turned out to be good, actually, but It's usually something that I don't recommend to people that I'm that I'm doing consulting work with, but I grew so fast that for the first 3 to 4 years, I was really kind of chasing my tail.
That's what I always say. And it wasn't until probably the end of 2016 that I sat back. And by this time, I think I had 5 team members. So 2 years in. I sat back and said, wow, like I'm running out of space. We've got referrals coming and I still need to hire more people. I don't know what to do. So I found a new space for us.
I continue to hire people. Referrals continue to come in. We had a, we were enjoying a really wonderful reputation in the community. I had therapists calling me, emailing me, wanting to come and interview with me because I was just doing something different in the community. I was running a private practice that no one had ever really experienced.
Worked at before and it was getting around to that. I'm generous. I mean, I'm, I would, uh, share profits at the end of the year with my team. I didn't mind doing that. It's actually something I enjoy doing. Not every practice owner wants to do that. And I make no judgment calls on that. But it was something that I enjoyed and as much as I possibly can, I plan to do that moving into the future, even as a W 2 practice, but it definitely, I enjoyed longevity with people.
I've still got people who have been with me since the very beginning, you know, eight and nine years, but moving into my eighth year, I had this sense that something needed to change. There were some things that were happening that I couldn't quite put my finger on that we're giving just. Just giving me this sense of unease.
And that's when I reached out to consulting. I actually worked with Whitney. She was great and really kind of to, to start narrowing down what was going on and what I needed to do. I originally said that I wanted to work with her to open a second location in a town about 45 minutes from here. And even though I still have that dream in my heart, I don't know that it's in the cards for me, at least not anytime soon, but my, my desires in consulting changed.
And that ended up. Of course, I applied that to my practice and that's what we ended up doing with the transition. So just to kind of outline what today's episode is going to be about. I am going to talk about making sure that you guys understand the 1099 and the W2 employment models. I know most of you probably already do, but it has just become.
My soapbox when I'm doing consulting with practice owners I am up on that w2 1099 soapbox from the get go like you have to make your choice about which one you want And then you have to make sure you have very clear boundaries with it because so many of us practice owners We just don't know and we do what other professionals did or we do what our former employers did and they weren't necessarily doing it Right either.
So I just want to spend a few minutes talking about the the differences between the models I want to talk to you about the process of transitioning, what that process looked like, how I prepared for it, and then how I implemented the change. And I want to talk to you about changes and benefits. after the transition and then challenges that I faced this year and lessons that I have been learning.
And again, I go back to just how good God is. He's just, I can't say it enough, He's just so good and His loving kindness overwhelms me at times. So understanding the 1099 versus the W 2 employment model. So, of course, with 1099, and the reason that I started out that way was because that's the only way that I knew to do a private practice.
I had done that earlier when we moved to Alabama, and that was what I understood private practice to be. So, with 1099, of course, there's flexibility and independence for both the practice and the contractors. We don't have the tax burden that a W 2 practice has. Unfortunately, it also means that we have limited control over how work is performed, but it also means that we don't have to provide a lot of benefits.
So, if you're looking to just rent out space, to not have to be in charge of a lot of people, a lot of therapists, then 1099 is a great way to go. Compare that to the W 2 employment model. As a W 2 practice owner, you have increased control and consistency in the work environment. So you have more of a say in just the, the day to day operations of your practice.
But it also means that you have extra responsibilities as an employer. Your tax burden increases. A lot of times therapists who come to work with you are looking for some, some kind of benefits. So you have to decide what you can and cannot afford. And then of course you have to be in compliance with labor laws.
And so why make the change? I decided to make the change because the name of my practice is my name. It's Dover Counseling Services. And when I opened in 2015, I named it that after giving it a lot of thought. I named it that because I had spent several years prior to that just building all of these amazing connections and relationships in the community.
I had no idea that the Lord was what's going to lead me to open my own practice. But once he did, I kind of wanted to put my name on it. I wanted to utilize my name because I knew people would recognize it. And they did, and it worked out. It worked out great. So, but as I started to, to hire people owned, they were also working under my name.
And as a W 2 model, I'm able to be a little bit more picky about, hey, if we, our notes, people judge us on our notes, our documentation needs to be top notch. Uh, we need to make sure that we're doing this, we need to make sure that we're doing that. I was doing that as a 1099 practice, but I technically wasn't supposed to.
So. I made the change because I came to find out that I was already operating as a W 2 practice, but my business model as a 1099 did not match that. So I was operating out of compliance, and so I needed to make a decision, 1099 or W 2, and then I had to move forward with that decision. So let me talk to you a little bit about the process of transitioning from 1099 to W 2.
I met with an attorney who ended up being this beautiful, lovely Christian woman. And guys, can I just tell you from the get go, God was in all of this. I mean, I have a, my accountant is a Christian man, wonderful Christian man here in the community. And God also led me to a Christian attorney, not to say that attorneys are Christian.
That's not what I'm saying, but I mean, I sensed it from her from our first meeting. I remember us sitting there and she, she made a comment. She didn't say anything about faith. It was just the comment she said, but it's just like. The Holy Spirit within me since the Holy Spirit within her, and it was just this beautiful moment.
And so the next couple of meetings we had after that, I just came out and asked her and she, she was talking about the shoebox ministry at their church. They were packing that because it was, this was right before, um, Thanksgiving of last year that we were meeting. And I was just, wow, God, just, For me, it was confirmation that I was making the right decision.
I had so much anxiety about the situation because I really did not think my team would like it. And that it was just confirmation to me that I was making the right decision, that he was in it, that he was seeing everything. I almost let Gideon in his fleece. It was confirmation for me that I was doing what he wanted me to do.
So I met with her several times and we came up with employment contracts. We sat down and did a handbook together. Now I definitely spent. legal side of things because once I, what she, she laid out to me what a 1099 practice looked like versus a contract or versus a W2 practice. And I realized how noncompliant I was being.
I had a choice to make and I could not un hear. I could not un know that I was out of compliance. And I really feel like, If, if we know that we're doing something that we're not supposed to doing, if I continue to be noncompliant and not make any changes whatsoever to how I operate in my practice and the business model of my practice, I truly felt like God was not going to be able to bless me with that.
How could he bless something that, I'm knowingly doing wrong, so that really made me kind of do my research on each model and really see how my practice would change if I went to a strict 10 99 model, which was what I was supposed to be doing. Or if I transitioned to the W2 and I chose to do the W2 route for multiple reasons that that I, I may get into most of them in this episode.
It just depends on our time, but a lot of it was because. My team liked the way that I operated. I really felt like they liked the support that we had in place. They liked some of the accountability that was in place. They loved all the referrals that they got and they liked the, I was already giving some benefits.
Yeah. I was so over the line of W 2 guys. It's just not even funny. They liked all of that. And we had staff meetings and we had, you know, get togethers and we were already operating as a W 2. And I just did not want, for me, a 1099, a strict 1099 model would just not work. It was not the type of practice that I wanted.
And that's one thing I always encourage practice owners to sit down and truly think about what is the culture that you want for your practice and which business model is going to align with that. And everyone is on different pages with that. And that is okay. My big thing is. Make your decision as soon as you can when you start scaling to a group and then stick with it because knowing that sets the foundation for future growth for your practice.
So the process of transitioning. So yes, I did have to evaluate, um, just the feasibility of it, the benefits of transitioning to W 2 versus changing it to a strict 1099 model. I had to look at the legal and financial and logistical considerations. There was just a lot of moving parts. I had to choose a date of when I needed to put this into effect, and I needed to make sure that I had all of my research done on my benefits.
I needed to have my compensation plans down. I needed to make sure that the paperwork was changed, you know, the client paperwork. I had to determine if I wanted to actually change my practice name rather than keep my name. Just a lot of things that I had to make decisions on. It was actually very overwhelming at times, but again, I had a great I had a great dream team, a great accountant and great attorney who walked alongside of me with this whole thing and a great consultant who did it with me too.
So I also started to, even though I was planning this, this transition at the end of last year, I did not announce it to my team until our staff meeting in January. I knew that it was going to be a huge change for them, whether they saw it as positive or negative. I wanted them to get through the holidays and not be worried about maybe saying, I wanted to get through the holidays and not have to worry about any kind of fallout that might happen.
And so I announced it at the January meeting and I also let them know that that I had, you know, a benefits package for those who were going to be full time. And I even had a couple of benefits that I was going to be giving to my part timers. And so I told them at the January meeting and I told them that it would go into effect on March 1st.
So they really had a couple of months to decide if they wanted to, to stay with me. They had a couple of months to come to me individually and so we could talk about any concerns and questions that they had. It gave me a chance to go and meet with them individually one on one and share with them what their compensation package would look like because it was going to They were used to getting 1099 contractor checks.
And I'm going to be giving them W 2 checks. There's definitely a difference, but that also they probably would not see the full benefit of being a W 2 until the end of the year when it came time for taxes. So with transitioning and then implementing that change, uh, again, there was a lot of timelines I had to look at.
I had to make sure that if March 1st was my official date of becoming a W 2, there were a lot of smaller deadlines I had to meet before that with employment agreements, making sure my staff handbook was in place, my workers comp insurance, getting liability insurance. for all of my, my therapists because it was going to come under the practice liability insurance now, not just their own individual insurances as contractors.
There was a lot of challenges and unexpected hurdles. A lot of people gave me pushback. That's a, I think that's kind of a nice way of saying it. I got quite a bit of pushback on my decision. I had one who, who quit within a month. She said, this is not what I signed up for. I don't want to do this. I'm going to leave and go open my own practice.
in the town where I live. And I'm like, okay, well, good luck to you. I hope that goes great. She did not leave well, unfortunately. She, uh, attended. Uh, very much to bring strife into the practice. It was a very vulnerable time for the practice already because everyone was very frightened of the change. And can I tell you how tired I got of hearing the phrase, I hate change.
I'm like, guys, we are experts in helping clients deal with and manage the change in their own lives. If you were naive and foolish enough to think that change does not come in business, I just don't know what to tell you. I don't know what to tell you. And I gave them a little bit of information about why I was making the transition that I had had our paperwork looked at by an attorney.
We were not in compliance with our business model. We were operating as a W2 and that I had a decision to make strict 1099 or W2. And that I had to make. I want a W 2 practice. That's the type of culture that I want. And some never understood my reasoning, could not hear my reasoning, because they, they made it all about what they wanted.
And I get it. I don't, I don't make any judgments about it. But it was, it was a difficult first few months. And I started the year with 15 therapists. I now have seven. I have been cut in half.
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[00:20:53] Amy Dover: This is where, this is where I get into, you know, I've had a couple of people ask me, Amy, do you regret making the transition? And I always say no, and that's not me being stubborn or me Me not wanting to admit that I'm wrong. I truly do not regret it because in this transition, it has really shown me some things that was growing in my practice that were, that were not good.
I'll give you an example. So I went to one therapist. She was one of my full timers. We were talking about some things that were going to shift with her. And, and a lot of them honestly were very upset that they, I had to explain to them how I was not taking money away from them, but that I was going to be covering benefits and taxes.
And so they, they could not get the huge percentage that they were getting. They were going to be getting this percentage. They were going to be getting this clinical fee when they saw clients. And that I do pay an admin fee. And I have a formula that I worked out so that admin time is not Go crazy, because it would if, if I didn't put some, some pretty strict boundaries on it.
So I was meeting with her about that, and she said, Oh, okay, so. And for those of you who have a cash practice, you may not understand these, these numbers that I'm getting ready to give out, but an insurance based practice owner is going to understand it. So, in this meeting, she said, Oh, so if I bill a 90834, which is a 45 minute individual CPT code, I'm still going to get this.
This clinical fee, even, you know, at that, even if, even if it's a lower reimbursement rate versus a 90837, which is a 16 minute individual code. I said, that's correct. It doesn't matter what CPT code you bill, you get the same clinical fee because I have always told you that you need to make sure that you're billing the correct services that the client needs.
And she said, Oh, okay, because I've always just discouraged people from doing family therapy and couples therapy because it pays less. And I won't, I won't deny them eight through seven code because it pays more. Y'all, I don't, I don't even think she knew what came out of her mouth. She said the quiet part out loud and my heart dropped into my stomach and I immediately thought, Oh, oh no, Jesus.
Like. Are most people doing this? Are they so concerned about the their contractor percentage that they've gotten away from doing the services that are most beneficial for the client? I mean, I was. Lowered by that and so I quietly started to just kind of dig around for that with other people and y'all that was happening that was happening in my practice and I really, I started to see this sense of entitlement and pride that had taken root here, almost like, well, I'm a therapist and I'm in demand and I need to make as much money as possible and so I'm going to build this and, oh, guys, it was just Even sitting here now saying it out loud, it just, it just hurts my heart because that is not the reason that we open our practices, you know, I opened because we needed more therapy services in my community.
And I felt like. The Lord was leading me to do that. And my, I've always had the idea and the belief that, God, this practice is yours. I am your steward. I know that if I make good, solid decisions, you are going to bless that. If I keep you at the forefront of everything, you are going to bless that. You are going to make things happen.
And I don't know if it was some of my hiring decisions. I do believe that people's attitudes and beliefs about their work here started to change. Over the last few years, I really think it's been since COVID, that was definitely a before COVID and after COVID attitudes that I could see in my practice, and I could see them already, even before this transition happened, but I did not know how deep, I did not know how deep the negativity ran, and it was running pretty deep, y'all.
Cause like I said in the, in the early part of the episode, I would get these sent the sense sometimes that something is just not quite right, but I just can't quite put my finger on it. And so this transition has helped to just root a lot of that out in the month of let's say I had one leave in February before the transaction, before the transition took place, I had four leave in the month of June.
I had one leave in July, two leave in August, and one is leaving in September. And y'all I'm okay with it. It was really hard at first and I'm not gonna lie. I mean, we've taken a hit on gross revenues. We went, I went from being a seven figure practice, I'm not going to hit seven figures this year, y'all.
And that, that hits your ego too as a practice owner. But at the same time, I have just surrendered to this transition in this process because the Lord is doing something new at Dover Counseling. He has opened my eyes to some things that were occurring that I needed to see. He has Readjusted our purpose for being in this community and, and for providing the services that we provide.
And the people who are left with me are really the core people who have been with me almost the whole time anyway. They are the ones who are truly aligned with what this practice does and what this practice's belief system is and what we are, what we believe are the most important values, and that is.
Our faith in God that is doing the best services that we can possibly do for our clients that is treating clients with the dignity and respect that they deserve. And that is giving them the services that they need, no matter what the reimbursement rate might be. And those who have stuck with me have individually come to me and said, you know, Amy, this transition has not been easy.
The checks are definitely different and it's been really hard for my family to adjust, but I trust you. I trust your leadership. Yep. And I'm behind you and I can't even tell you. I can't even tell you how moving, I found a lot of those conversations because like I said, this has been the most difficult year of the, of my practice, but also for me emotionally as a leader.
Um, God has really shown up in a lot of ways for me this year. I mean, just with his. His tenderness and his kindness and, you know, throwing out a fleece for me every now and then, like I said, I'm, you know, doing Gideon every now and then this year, just needing that confirmation and, but he has been so faithful, so faithful.
I shared with you guys in a couple of episodes ago that I keep a journal. And one of the reasons I do keep a journal is because I do think that remembering His faithfulness is important to us. And so last week I had a particularly difficult week because I do have this beautiful building that I was able to purchase two years ago.
And that's a God story in and of itself, but maybe I'll save for another episode. But, um, it's about 6, 700 square feet. And it's two story. And when I opened the, when I, when we moved into this building two years ago, every office but one was full. And now, I'm moving all of us downstairs so that I can look into renting out my top level of, of my building, because.
I don't have the gross revenue. I can make the mortgage payment, but it's really hard to make other things. And I'm not going to lie. This transition has drastically affected my finances for the practice. Are we in danger of closing? Of course not. Are we going to go bust? Absolutely not. But it has definitely made me have to do some.
You know, kind of tighten up my operational expenses and do something not be as generous as I would like to be, because I just don't have the extra revenue. I don't I'm not making much profit this year. And that's just to be very vulnerable with you because. Again, I don't regret this change, but I'm still in the middle of the, just the effects of the change.
And I'm still in the middle of this process and the dust is still not settled yet. And it will, and it will within the next few months. But last week was, it was difficult. I had to give up my beautiful executive office in the building because I need to rent it out. And I really struggled with my ego on that.
And Making sure that I did not fall into distorted thoughts and feelings about this being failure and regression on my part, because the reality is that it's not. The reality is that God has other things in mind for Dover Counseling, and I'm surrendered to that and what it might look like over the coming months.
And it also means that part of my building can be opened up to another business here in town who can serve our community. And if. And I have no doubt that if I'm able to find a tenant to share the building with me, it's covered in prayer and God will bring the right one at the right time. And so to me, it has just been this, since this is really January of this year, it's just been this continual journey of depending on Him daily, not getting ahead of Him because that's my tendency.
I want to get everything done yesterday and do everything in my own power. And he has really shown me, hey Amy, surrender to my process and my timing, and I want to show you what this practice is going to look like. So just real quick, changes and benefits after the transition. I've already been speaking to some of that, but daily operations of the practice did change a bit when we moved from contractors to W 2 employees.
There's, there was an impact on workplace culture and team dynamics. There's definitely a greater consistency and control over service delivery and the client care because now I can say No, if this client is requesting couples therapy, then this is what we need to provide them It's not all about billing the 90837s and getting the big fee because You're going to get what you get anyway.
And so one of the things that I noticed about some of the people who have left, they really did not like the additional accountability that came into play with this move. It definitely impacted the culture of the team and the team dynamics. I've got some pushback from it. I got pushback from people complaining that they weren't making any money.
And well, I said, but you're also not seeing your clients. Like we switched to 1090, we switched for W2 and March 1st. And since then, you've not seen your, you've hardly seen any clients since then. And you were killing it when you were a contractor. It was almost like for a lot of them that left, it was almost like this institutional mentality settled back into their minds.
Uh, people were upset that I didn't pay them for no shows. People felt that they, that they should get paid at the clinical hour for time, for paying time off, I pay at the, at the administrative rate, hopefully one day when the practice is settled and. I can look at that again and maybe pay an average of clinical and admin time for the PTO, but right now I can only do the admin time, but it was a lot of pushback with the finances with their money and just the accountability because when I would sit with them and say, Hey, I'm, I've given you this amount of referrals since January 1st, so I'm not really understand why you're not seeing the number of clients that you need to be seeing every week.
And, you know, this is like June. Let's go through your caseload and see what we need to do. Well, people would turn in their notices like two weeks after that. And again, I see that as the ego played a part in that for everyone. Everyone has to make their own decisions. I mean, at the end of the day, I left my previous employer because I wanted to open my own practice too.
And so I'm going to, I'm going to. Respect that. I'm going to understand that and support that. And at the end of the day, it also means that there are more counseling resources for our community. My, my difficulty came in with the way that some people left and I won't go into detail about that, but some people were quite hurtful in the way that they left my practice.
And it just didn't have to be that way. But again, God is good, and He is providing, and I wish everyone who has left, I do wish them well. I don't wish anyone any ill will. I pray for them. I pray for their, their practice of success. I pray for them to understand just how difficult being a practice owner is, and there's even a couple of them that I'm walking with as they, as they work to, to maintain the stability or to get their, their practices more stable.
So also part of the change was the financial and administrative impact. There were changes in our financial responsibilities, including the payroll and the benefits, because we do offer, for full timers, we offer paid time off, paid holidays, the big holidays. We also do, I was planning on doing some retirement, but I'm not in a place where I can do that yet.
We do CEO, CE, CEU reimbursements. I pay half of the premium of their individual health insurance. And after a year, which all of them have been with me for well over a year at that point anyway, I also pay some towards any student loans that they have. It's not very much, but it's still in addition to what they're already paying.
So I feel like my benefits package was pretty solid on top of the financial compensation I was giving them. But again, You would be really surprised by how much pushback I got from that. People were angry, angry that they weren't getting more. I'll put it that way. And so in terms of the overall financial health of my practice, it's like I said earlier, it's taken a hit, but I also know that this is the, this is the temporary hit.
This is not where we're going to end up. Overall, once the dust settles on this transition and I'm able to hire a couple more therapists, we're going to be just fine. Because even though I may not be a seven figure practice again this year or even next year, it doesn't mean that my profit margin is going to be any less.
You can have a smaller practice and still have a very healthy practice margin or profit margin. That's really what we're trying to look at here. So keep that in mind too, for those of you that are considering making a transition like this. And even if you're considering going from a W 2 practice to a 1099, it can certainly go in the opposite direction.
So I will say that a lot of people had told me just how pleased they are with the health insurance that I chose for the practice. They're, they're very happy with the paid time off. Yes, they would like to have a little bit more compensation for their time off, but they also like the idea that it's there.
For people that I had interviewed to come on board with us, I have hired a Couple of months, she will start with us in November. So she is our eighth team member. But when I, when I showed her the compensation and the benefits package, she was floored and it was so sweet. She said, Oh, Oh my goodness. I get paid time off and I get this and that.
And. Yes, you do. And so there are people out there, and I'm having to remind myself of that, there are plenty of people out there who want to work for a W 2 practice, and you will attract a different type of therapist as a W 2 practice than you will a 1099. I didn't think that was the case until I actually made the shift.
And that is truth. It is truth. All right. So as I said, I'm going to wind this down because I've been talking for quite a bit. Like I said, I could talk about this topic because it's near and dear, especially right now, for a while, but I also want to be mindful of my time. So just make sure that if you're thinking about making a transition like this, that you're running your numbers, that you're walking alongside your dream team, that you really have looked into and have hired a consultant.
If any of you. Any of you are considering this or you think you have some holes in your business model, or you're concerned that you're blurring the lines between 1099 and W 2, if I can help you in any way, please reach out to me. I love coming alongside practice owners and doing this with them, and I will tell you that I'm Sometimes what I'm doing, um, pre consult calls with potential consulting clients, I always want to know how they're, how they run their practices, how their practices are doing.
And I can't tell you almost nine out of 10 times they're blurring the line between 1099 so I automatically give them that feedback in that pre consult call, because I just feel like we need to have, we need to be in compliance. There, that just, it is what it is. We need to be in compliance with the IRS and with the government laws and labor laws.
And then also, it's also just part of conducting good ethical business. And it sets the foundation for solid growth for your practice. So we have to do those things. There's definitely a difference running a W 2 practice versus a contractor practice. But again, I would not go back. And I have, I have found my love of private practice again.
For months, I just didn't want to be here. Even before this year, I just didn't want to be here. I had a team, the biggest I've been, a 16 therapist and two admins, and I did not find much joy in that. The bigger it got, the more of a hassle it felt like it was. Just the bigger the personalities became, the more, People just wanted all the time and some of that could certainly be about my leadership.
You know, I'm always learning how to be a better leader. I want to be the best leader that I can be. And I'm going to speak to how mentality shifts when you go from a solo provider to a group ownership and in my next episode. But I just really encourage you if you're thinking about a transition like this to get get people with you who understand your who want your success, who can speak into this and give you solid wise counsel.
But most of all, make sure that you're praying about it. Make sure that you're taking it to God, that you're laying it out before him, that you're trying to make sure that you are seeking his clarity and his wisdom and his guidance. And you will not go wrong if you do that guys. All right, I'm wrapping it up for today.
Thank you so much for sticking with me. Email me if I can help you. My email is Amy at WisePracticeConsulting. com. If you're interested in my consulting packages or checking out my bio, go to the website, WisePracticeConsulting. com. I love working with practice owners. I've been in it almost 10 years and I've been a therapist over 20.
I love the profession. I love what we do. I think private practice is such an adventure that God goes with on, goes with, goes on with us. But at the same time, it's important that we have the right people on our team and that we have the support that we need. Guys, have a great day and a great week, and I'll catch you in the next episode.
So
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