If you haven’t been living under a rock for the past several weeks, you’ve been bombarded with stories about COVID-19 caused by the novel coronavirus.

We’re all watching with concern, if not fear, a rapidly escalating health crisis with an expanding geographic footprint and ever-increasing numbers of people testing positive for the virus, people becoming severely ill, and people dying. If you're not concerned yet, read this.

My wife Risa and I were talking about what she should do around her practice as a result - should she close the office and do teletherapy only? Should she keep the office open and put bottles of hand sanitizer everywhere (if she can even find any after the panic-buying of the past few weeks)?

I then wrote a whole article about sensible responses for your practice. Just one problem - I'm not an epidemiologist, and you can find online the same things I find there so what's the point of my writing about it?

Then Risa suggested that I concentrate on what is in my wheelhouse and offer you a financial coronavirus response plan for your practice. So, with thanks to Risa for the idea, here it is.

The Coming Reality

To create an effective response plan, we first have to have an idea of what we're responding to, as specifically as possible.

Here are my thoughts on that, but feel free to make your own list, since you live someplace different than I do (so there may be more or fewer people carrying the novel coronavirus around you), you may be older or younger and healthier or less healthy than me (which affects your probable mortality risk should you come down with COVID-19), etc.

• Since "social distancing" appears to be the most effective (if not currently the only) tool in our toolbox to reduce the impact of the novel coronavirus, your clients may choose to stop coming into your office (or you may decide it's best if they don't come in person), or they may even be ordered by the government to avoid non-critical travel.
• As a knock-on effect, your clients may have trouble getting to work, so they may not get paid for a while. This would make it harder for them to pay for your services.
• If you have young kids and the local school system shuts down, you'll need to stay at home to care for them. This will significantly affect your ability to see clients even if you're set up to provide teletherapy. 
• If you become sick yourself, you will obviously not be able to see clients at all for at least 2-3 weeks. If you're older and/or have underlying illnesses, it may take even longer for you to recover enough to be able to resume working.
• All this means that your business income will almost certainly decline significantly or even stop completely over the coming weeks or maybe even months.

On the other hand, when people's routines are scrambled, if they and/or their kids are forced to stay home for weeks or months, and if their income is disrupted, the likelihood is that there will be much greater need than ever for your services in the near- and intermediate-term future.

Sensible Ideas for Your (Financial) Coronavirus Response Plan

Faced with the above potential situation, the first and most important thing is to not panic.

Next, you'll want to minimize your financial exposure - no pun intended - so you're less likely to suffer severe consequences.

Finally, you'll want to position yourself to be the most helpful you can for your clients and those who will want to become new clients.

Here are my thoughts on all these.

Minimizing the Financial Exposure of Your Business to the Effects of the Coronavirus

Since there's a high likelihood that your income will drop, if not completely stop, you need to minimize your business operating expenses by reviewing and triaging everything. 

• Delay purchases of supplies such as coffee, tea, or water for your waiting area - if in-person client traffic slows or stops, you don't need a multi-month supply of those anywhere near as much as you'll need the money.
• Stop business meals - this will reduce your costs as well as your potential exposure to coronavirus.
• If your license renewal is a good way off, don't do any CEUs for the next few months. If the renewal is happening soon and you're missing CEUs, get only inexpensive ones that are offered remotely. This too will reduce both your costs and your potential exposure to the virus.
• If you were planning to replace your laptop, office furniture, etc., put those plans on hold for now (unless the need is critical such as your laptop exhibiting symptoms that show it's about to die).
• If you have a waiting list of clients, consider reducing your marketing spend at least for now. 

These and similar steps will reduce your operating expenses, helping mitigate the impact of the coming reduction in your revenue.

Minimizing Your Personal Financial Exposure to the Effects of the Coronavirus

Once you've minimized your business expenses as far as practical, it's time to do the same at home. You want to trim discretionary spending as much as possible.

• If you're planning to remodel your house or replace furniture, put those plans on hold.
• Review your subscriptions, especially streaming video and music services. If you're paying for Netflix, Hulu, Amazon Prime, and several other services, figure out which ones you use the most, and cancel the others.
• Be more judicious in using your car - if you don't have to drive somewhere, don't. If you have several errands to run, bunch them together to make the trip more efficient.
• Cut back or even stop spending on things you can do without for a few months (e.g., new clothes and shoes).
• Cut back or cancel altogether eating out. Just like not going out to business meals, you'll reduce your costs as well as your potential exposure to the virus.

Just as with your business operating expenses, cutting back lets you absorb a reduction in income with less stress.

The smaller your emergency fund (assuming you were even able to build one up), the more ruthless you'll need to be with the above trimming.

If things get really bad financially, you'll need to become even more creative.

• Reach out to your mortgage lender (or landlord) and ask what accommodation they might be willing to offer. This might be paying a smaller amount than normal for a few months (be aware however that if your lender lets you pay less, your interest will still accrue and you'll end up owing more).
• Reach out to your credit card issuers and see if they're willing to reduce your interest rate and your minimum monthly payments.
• Pay attention to any notices from the federal, state, and local governments as to what accommodations and support they're offering in terms of deferring, reducing, or even canceling of taxes, penalties, and fees owed.

Positioning Your Practice to Best Help Your Clients

Now that you've finished preparing yourself to survive the coming storm, it's time to position your practice to best help your clients and prospective clients.

• If you haven't already set up a HIPAA-compliant teletherapy service, do that as soon as possible. If you offer group sessions, figure out a HIPAA-compliant multi-participant teletherapy service. For each extra person in the room, the risk of exposure increases factorially, which is faster than exponentially! Then, offer these remote services to your clients in place of in-person therapy. This is especially important to your older clients, as the mortality rate from COVID-19 is higher for older people and those with underlying illnesses. However, even if your clients are children and teens, they can spread the virus to their parents, grandparents, neighbors, etc. 
• Make sure that you (and your associates if you have a group practice) are trained in the logistics and therapeutic implications of telethrapy.
• Make sure all your clients who choose teletherapy reside where your license is valid. This is especially important if your clients are college students from out of state. Many colleges and universities are already shifting to remote lectures, and if your client moves back home, she may be in a state where your license isn't valid. Having said all this, the government is in the process of relaxing some regulations around tele-health and state-specific licensing, so pay attention to see if these new relaxed rules will be applied to mental health.
• For those clients who can't (or don't want to) do teletherapy, consider if you're willing to meet them in person. If yes, make sure to practice the sensible precautions of keeping at least a few feet away at all times, and frequently washing hands and disinfecting surfaces. If you decide to move to teletherapy-only, you'll want to communicate how long this will likely last (subject to updates as the pandemic situation unfolds), so they can make an informed choice.
• Finally, to the extent that you can afford it, consider allowing clients impacted financially by the crisis to pay you over time rather than at the time therapy is provided. Alternatively, you may consider offering them temporary sliding-scale fees. Note that I say this should be to the extent that you can afford it - if you can't make your payroll, rent, and other payments, you may be forced to shutter your practice, in which case you won't be able to help anyone.

The everyday stresses that bring people to your practice in normal times are about to be magnified by fear of the virus, fear of the coming economic hard times, potential loss of income, forced long-term proximity to family members they may not get along with, etc.

This means that your services will be needed more than ever in the coming weeks and months. It's up to you to make sure that you and your practice are ready and able to help your clients.  

The Bottom Line

Social distancing, government orders to minimize travel and in-person events, natural fear of the pandemic, these will all impact us in ways we're just beginning to understand. The stock market is already crashing. The economy will suffer (with some industries like travel, hospitality, etc. looking at potentially catastrophic impacts). As a result, people's ability to afford paying for everything will suffer, and discretionary spending will most likely drop off a cliff.

Preparing yourself for the impacts of these coming realities is critical and urgent. The best time to prepare was months ago. The next best time is right now. While panic is counterproductive, now is no time for complacency or procrastination.

I'm putting together a free webinar in the very near future to do a deeper dive on what you should be thinking about and what you can do, expanding on the important topic of preparing yourself and your practice for massive disruptions. Please email me to pre-register for the webinar (and start getting my free biweekly tips and tools if you're not already on my mailing list).

Disclaimer

This article is intended for informational purposes only, and should not be considered financial, legal, or health advice. You should consult a relevant professional before making any major decisions.