1. Separate Business and Personal Accounts - The most important thing you can do right away is to separate out your personal and your business spending. If you have a PLLC go ahead and open a business checking account. If you don't and are using a DBA, open a checking account that is separate from your personal checking so you have your money going into a different account.
Consider also setting up a savings account that your checking account is linked to: you can automatically set aside money each month (taxes? planning for a conference?) and it serves as an overdraft protection. Also, a business credit card can be a great way to both track your spending and earn cash back or miles!
2. Categorize your expenses - Now that you have all your work-related income and expenditures going in and out of a separate account, it's time to track your expenses. Ever payment you make should be categorized so that when it's time for taxes, your deduction categories are already set up. I suggest getting familiar with the categories, and setting them up now.
Use a program like Xero, Quickbooks, or Mint to track your expenditures and label them. This will save you SO much time later on. Promise. ** Note: These are NOT HIPAA compliant so you cannot use them to track your client payments. Quickbooks desktop CAN be used for that. If you use an EHR system you can track your client payments on EHR (do invoicing there) and your expenses on your accounting software.
3. Track Credit Card Fees You Are Charged - Another thing I see folks forgetting to do is to track how much money is getting deducted by the credit card companies. For example, when you see a deposit of $470 into your account, you need to open that entry and show that your client income was $500 but $30 was deducted in Stripe fees (for example). That way your income matches up with the actual money you took from clients and you also account for the $30 you paid Stripe (which may be deductible later).
4. Deduct travel for conferences - Travel, food during travel, and conference fees are all deductible come tax time. Make sure you keep the receipt, and write a note on the top showing what it was spent for (e.g. "Psychology Conference in Houston").
5. Pay Quarterly Taxes - One of the ways you can avoid getting hit with taxes later is to pay your estimated quarterly taxes. You may also be required to pay an incur a penalty if you fail to. This is one of the biggest changes from being employed to on your own. For more information, check out Quickbook's explanation here.
6. Deduct Food Expenses - If you eat out in the course of doing business, you may be able to deduct 50% of the tab. There are a couple tricky spots that you might get in trouble with... If you only pay for yourself, and not your companion, the IRS might not accept that as a work outing. Also, you need to be able to explain what that meeting was about. Make sure you list on the receipt who you met with and a couple items discussed.
7. Set up a retirement and safety plan - You might not think you're making enough to save, but it's never too soon to be ready. Consult with a financial planner to determine the best way for your family to save. You might also consider investing in life insurance, or disability insurance.
8. Medical Expenses - If you are not married, or if your spouse doesn't have a plan that you can join, you may be able to deduct your health insurance and medical expenses. Talk to a CPA to find out more.
9. Legal and Professional Fees - You can deduct fees spent on legal and professional services. These include paying for your accountant, lawyer who draws up your incorporation agreement or consent paperwork, fees for your membership to professional agencies, licensing board fees, continuing education fees, and so on.
10. Track Your Mileage - Believe me, it's worth it. Download one of the many apps to make it simplier. For details on mileage tracking, check out the rules here. I've tried a few and MileIQ is by far my favorite to date. It automatically logs your drives as soon as it senses you are moving, and it lets you categorize your drives to business or personal by swiping them (so quick!). Plus, it will autocategorize drives you make frequently.
by Sarah Griesemer, Ph.D.
Originally posted on Session Notes
When I first started a private practice and decided on my fee I looked around at what other people were doing, picked a number, and wrote it on my consent forms.
Little did I know that this was exactly the WRONG thing to do when setting my fee, and it was seriously setting me up for failure. Luckily, I had a fantastic business mentor at the time who helped me figure out how to set my fee for success. Now, I get to pass along that wisdom to you. Here’s how to set yourself up for success in three steps!
1. SET YOUR FEE BASED ON HOW MUCH YOU NEED IN YOUR POCKET.Most therapists set their fee and try to get a bunch of clients in the door. Then, if they aren’t making enough money, they try to get MORE clients in the door.
This ringing any bells?
The problem with this approach is that it assumes that the fee you set is high enough that you CAN see enough clients to make your take-home without going crazy.
Let me float you an example of how this can go south: You set your fee at $75/client and set a goal of seeing 15 clients a week. At $4500 of income you find that after the first few months you are taking home around $1500 each month. Soon after, you realize this isn’t enough. Your daughter is getting braces and you need to bring home $3,000/month.
One problem is that we forget that the fee we set doesn’t cover the hour of work we do with the client. It covers ALL the work we do for our BUSINESS.
At 15 clients, when you’re done making calls and doing other tasks, you’re already working around 34 hours/week and don’t have a lot more time to add more. (I estimate for every client hour you do 1.25 hours outside of session.) Suddenly, you realize that to make the money you need, you’ll have to start working on a Saturday and miss some of your son’s t-ball games.
Unfortunately, since several weeks have already passed with you not making enough, the burden is only greater, and the panic increasing. By postponing looking at your expenses and income, you’ve only delayed the panic and made the whole situation worse…Which leads me to #2…
2. MAKE A BUDGET
It’s boring, I know. I hated doing it, too. But you know what else I hate doing? Dishes and laundry. But I do those. All. The. Time. Why? Because if I don’t I’ll end up with piles of mess everywhere.
I hate to break it to you but if you don’t budget, your practice's finances are gonna be messier than a pile of dirty dishes in the sink. It might lead to debt, financial problems, or the closing of your private practice. The best thing you can do for your practice to see it thriving is to create a budget. It will enable you to figure out your fee based on what you must make instead of what seems like a good idea.
3. FACTOR IN PTO AND SICK DAYS
If you were working for someone else, you’d have vacation days and sick days available for you. Even though you are working for yourself, you still need PTO and sick days. You’ll also need to be out of the office here and there for trainings.
Unfortunately, most people don’t factor these into their fee. Instead, when they take vacation days and their income dips, they hit panic mode and feel worried about money and anxious about taking time off. If you factor time off into your fee, you know that you’ve been able to set aside money for just this occasion! It makes the ebb and flow of private practice feel more manageable, and vacations feel more stress free!
Let me break down the above fee example for you in the real life lens…the above formula doesn’t cover days off, sick days, days your kid is sick, days your client is sick and cancels, or the normal ebb and flow of private practice. Which means, you probably need to aim for more than 20 clients to cover those things. Add in paperwork, phone calls, marketing tasks, and insurance filing (I estimate you spend 1.25 hrs on business tasks for every client) and all of the sudden you are working 50 hours a week.
But if we do the math backwards, you get a recipe for sanity. For example:
My take-home (profit) must be: $3000
My expenses are: $3000
So I need my income to be: $6000
I’ll factor in PTO, vacation days, sick days, cancellations, and general ebb and flow of clients: I’ll estimate 2 full working days a month.
I have the bandwidth to work 40 hours/week which means about 18 client hours (if we assume my admin time from above).
In other words: 18 clients/week x fee – 2 days of income/month = $6000.
This gives us the suggested fee of $150 which is a HUGE departure from what we had guessed.
What a difference knowing your expenses makes!
This doesn’t mean you have to charge $150/client. But, it does mean that something will have to give if you want to charge less. Maybe you will have to work longer hours. Maybe you will have to make less money. Or maybe you will have to find a cheaper office space.
WIth this knowledge you can make planful choices about your practice so that you can enjoy the work you do and help your clients without feeling panic about money.
In the end, that’s usually what we want most of all.
You can find sample budgets online, or you can check out our Fee Setting Video Series HERE complete with sample therapist budget, a fee setting worksheet and three videos to get you going.
When Natalia and I sat down and started talking about our Private Practice experience, we heard ourselves saying the same things. It was both really reassuring to hear someone else saying "I had that problem, too!" and really really annoying.
I mean, how many of us have to experience the same problem before we work together to solve it?!?!
And that, my friends, is just what we want to do.
Today, I want to share with you one of the biggest problems we faced when starting private practice.
Time is Money, and they are both damn hard to manage.
Let me see if any of this sounds familiar...
A client calls. "I can see you at 4pm Wednesday and 6pm on Thursday," you say. "Oh, man, I can only come at 7pm on Thursday," the client says. Well, I mean, I guess I could stay an extra hour... I do need the clients... and the money, you think. "Okay, I can make that work," you say.
Or this one...
Your client texts you, "I'm not feeling great so I'm not going to make it in this week. See you next week." It's only 10 hours before the session, but this is only their second late cancellation, and they aren't feeling good... so I can let it go...
Or my most common mistake I made at the beginning...
A client calls. You talk. You're a great fit. You say, "I charge $120 an hour, but I do have a sliding scale available if clients need it." The client-to-be says, "Oh, money is tight, I think I do need the sliding scale. How does that work?"
Here's the thing... both money and time are energy that we give and take from people around us. As wellness professionals we are givers. We love to help. We take care of people. Somewhere along the line we got the idea that means a one-way flow of our energy outward. That's a sure-fire way to achieve burnout, an empty pocketbook, and resentment. Believe me... I've been there...
What I learned is that with a couple scripts in your pocket you can handle phone calls like a boss, and stick to your schedule or your fee while STILL landing those clients.
Natalia and I have developed two workshops just on scheduling and money to help you get super-crazy-clear on how to get clients, make money, and keep a schedule that doesn't make you crazy.
This is my soul work, people. I can't tell you how happy I am to help support happy wellness professionals. What I know is that with just a little time set aside to work on this, you will create more time and space in your life.
Our registration for these workshops are about to open!! I am sooo excited! Sign up for our newsletter above to be the first to know about how to sign up to get our Early Bird Pricing!!!
I've met a lot of frustrated supervisors.
As a supervisor myself, I know there is a lot to be frustrated about! You get your training, add that "S" to your credentials, and expect to get to mold new therapists and teach them the treasures of the job. You've probably been excited to enter in to this period of your practice!
And then... crickets...
Okay, so I poked around on the website for the Texas Department of Health Services, and do you know what I learned?
The Stats Are Surprising
There are 337 listed supervisors in Austin.
There are 347 listed interns listed in Austin.
That means that there is almost one supervisor for every listed intern! In other words, supervisors nearly outnumber interns. Not a good ratio! Being a supervisor in Austin is highly competitive.
But you don't really want just any supervisee. You want a good supervisee, who will follow rules, be ethical, and is open to feedback. RIght? Finding a supervisee that is a good fit is no easy matter.
There is Hope!
Before we get all doomsdayish... what this really means is that supervisors need to be mindful of how they market their skills and their supervision.
Here are the most important ways a supervisor should market:
Word of Mouth
Most supervisees find their supervisor via word of mouth. It is very important that you stay on the radar of others in the field. This could mean that you reach out to your colleagues every few months by email to let them know you supervise. ("Every few months?!" you are saying to me. Yes. People are busy. And they forget things. Even wonderful things like you supervising. Unless you remind them, you will slip off their radar. So, yes, an email in front of them every month or so is a great way to stay on their minds.)
Most supervisees google their potential supervisor before calling. They are scoping you out. They want to see what you look like, how you talk, what you "feel" like, and what your rates are before making that first call.
Which leads to...
Your website is your gateway. Your website needs to have an awesome "about me" page that describes who you are AS A SUPERVISOR and what you are like so that a good match is made before the phone even rings. The page you have for clients DOES NOT COUNT. Potential supervisees want to know how you approach supervision, which may or may not be the same as how you are in therapy.
Check out our About Me help video if you are feeling stuck.
Consider using a Supervisee-match service. Thank goodness for technology. Services like "Find My Supervisor" help connect supervisees and supervisors based on licensure and location. For a small fee, you can be listed to get better visibility and access to potential interns.
Whatever path you choose for advertising yourself, know that the key is being authentic and true to your voice. When you communicate who you are, a great match can happen.