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Best Way to Pay Yourself from Your Practice

You have your very own private practice, and even paying clients – congratulations! You’re officially the owner of a business with revenue (and hopefully profit too!). How do you pay yourself out of your profits? Is that the best way? Can doing it differently save you money? Here are some ways practice owners pay themselves, their pros and cons, and which one is best for what situation.

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Reframe Your Procrastination to Power Breakthroughs in Your Practice

Mark Twain jokingly attributed to Benjamin Franklin a celebration of procrastination – “Never put off till to-morrow what you can do day after to-morrow just as well.” Joking aside, I’ve come to appreciate my own instances of procrastination as a deep probe into what my mind shies away from. If you’re like me, when you find yourself procrastinating, it’s almost always because your subconscious mind finds the task overwhelming, unpleasant, or unclear. Here’s how you can reframe that procrastination from something you might be ashamed of to a source of breakthroughs, both personal and in your practice.

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Categorizing Your Business Expenses Wrong Can Cost You

A therapist I coach was making a couple of mistakes in how she categorizes her business expenses, which would cost her hundreds of dollars a year. Here’s what I suggested she do, which should put a nice chunk of change in her pocket. If you’re making the same mistakes, my advice may do the same for you.

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Rental Space Checklist - What your Private Practice Needs

It’s one of the biggest, if not the biggest expense in your business budget. Getting it right can attract more of your ideal clients. Getting it wrong can be a painful and expensive mistake from which it’ll be hard to extract yourself anytime soon. It’s renting the right space for your private practice. Here’s the 15-point checklist we used to choose rental space when my wife was still renting from others. I use the same list when coaching therapists today.

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Are You Setting a Trap for Yourself?

If you’re a member of online therapist groups, I’m sure you’ve seen plenty of threads that start off something like: “I’m looking for intake forms for my private practice. If you don’t mind sharing, please…TIA.” There’s nothing wrong with frugality, and I’m all for reducing business expenses. However, being frugal has its time, place, and appropriate targets. Your intake forms are not one of those! If you’ve been collecting forms shared by other therapists here and there, you’ve been setting up a trap that may well spring on you one day… when you’re audited for HIPPA compliance or worse, when someone sues you for breaching their health information privacy.

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Are You a “Walmart Therapist?”

“You get paid what per session?!” I asked my wife after noticing her low monthly payment from the group practice. “On average insurance pays them $60 so my split is $30,” she replied. “That’s outrageous!” It wasn’t her fault, and if you’re getting paid similarly ridiculous amounts per session, it’s not your fault either. You’ve probably become what I call a “Walmart therapist,” suffering from an extreme imbalance of power.

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5 Secrets You Can Use to Achieve Long-Term Success - Part 2

In the first part of this article, we looked at how acknowledging our emotional/cognitive limitations is a crucial, if perhaps non-intuitive part of your long-term financial success. I also explained why I disagree with financial “gurus” and much of their advice on buying homes and prepaying mortgages. In this part, we start with another non-intuitive but compelling factor to your success, follow with a system/process “secret,” and conclude with how and why opening your own practice can be a critical part of your roadmap to success.

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5 Secrets You Can Use to Achieve Long-Term Success - Part 1

If you’re a fan of Suze Orman or Dave Ramsey, this article will challenge you. My advice on how to achieve financial success is very different from what such financial “gurus” have to say, but I have good reasons for it as you’ll read here. While I don’t know of any way to get rich quickly without unacceptably high risk (e.g., playing the lottery or day trading), you can achieve long-term financial success. Good fortune (think great stock market returns or marrying somebody who’s already wealthy ;)) helps but isn’t up to you or me. In this two-part article I cover five things you can control in your professional and personal life that help achieve long-term success.

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7 Crucial Considerations When Renting Out Space to Others

If you see clients in person in your practice, office rent or mortgage is one of your largest business expenses. If the space is large enough, subleasing or renting out to others is a great way to offset a big part of that cost. When my wife Risa’s practice reached full-time, she rented a 5-office suite and subleased several offices to other therapists. Several years later, we bought and built out our own suite, renting space to six therapists. Several of them have now been with Risa for over nine years, moving with us when we established our own suite. Here are the most important lessons we’ve learned over the years on how to get the best renters, and how to keep them. Whether you’re considering becoming a landlord or renting space in someone else’s suite, this post is for you.

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The Surprising Reason Why Charging Higher Fees Helps Your Clients as much as It Does Your Wallet

Therapists in private practice are mostly driven by two commitments, not necessarily in the following order. First, to help their clients find relief from their traumas, emotional pain, and relationship problems. Second, to help their own families achieve a prosperous future. My commitment when coaching therapists is to help them realize that even when the two commitments appear to conflict, you can reframe them and see how not only are they not in conflict but are actually intimately aligned, like the pronghorns in the photo.

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Are You Leaving Money on the Table?

If like me you live in a high-tax state, you’re suffering the huge impact of the new $10,000 limitation on deducting state and local taxes plus property taxes. This means you probably get to keep just slightly more than half of the last dollar of your income! Now I get that reading about taxes is about as delightful for most of us as going to the dentist for a root canal job, but if you’re not diligent about maximizing your business deductions, you’re leaving a ton of money on the table which will be even more painful. So, grit your teeth (bad pun intended) and read on to avoid the pain of needlessly paying more taxes than you must…

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The Simple Mistake that's Costing You Thousands of Dollars Each Year

If you’re like most therapists in private practice, I can almost guarantee that you’re making this simple mental mistake that’s costing you thousands of dollars every year. If your practice is full, that may even be tens of thousands of dollars. What’s worse, beyond the simple loss of income, it’s forcing you to see too many clients, making it harder to keep bringing your best self to the chair.

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Are You Getting the Same Benefits as Employee Associates at Other Group Practices?

If you’re an employee associate or are considering becoming one, here are lists of benefits employee associates get at some practices. If nothing else, this offers a sanity check to see if you're incredibly pampered, taken advantage of, or somewhere in-between.

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Transitioning Your Group Practice from Independent Contractors to Employees

If you have a group practice based on independent contractors and are contemplating transitioning to an employee-based model, here are the steps we took to transition my wife’s practice to an employee-based model, including deciding on benefits for the staff, and best practices of managing the team through the change.

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Associates in a Group Practice – Independent Contractor vs. Employee

Many therapists in private practice at some point expand their practice by bringing in associates, either as independent contractors or as employees. If you joined such a group practice as an IC, or if you’re considering joining, there are certain things you should be aware of so you know your rights as a contractor, and know the possible consequences that risk your source of income if the practice owner misclassified you.

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Choosing the Right Group Practice Model – Independent Contractors vs. Employees

Not every practice has to become a group practice, but those that don’t will reach a ceiling of how much of a difference they can make, dictated by the limited time of a sole practitioner, especially if she also does all her own marketing, purchasing, appointment-setting, etc. If you want to expand to a group practice, you can add associates either as independent contractors or as employees. Whether you run a group practice or are planning to expand into a group practice, here are some critical things you must consider when choosing how to add associates.

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How Does Your State’s Median Income Stack Up (and Why It Matters)?

One of the most human things is to want to compare yourself, your town, your school, your state, your country, etc. to others. So when I saw this headline “This Map Shows the Average Income in Every State—and What It's Really Worth” I was intrigued. Why does your state’s median income matter to you, and where does it rank compared to the rest of the country?

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3 Things to Remember that will Help Reframe the Sliding Scale Discussion

Some clinicians have concerns about clients possibly claiming to only be able to afford a fraction of your full fee while driving a much nicer car than yours. This is a completely human thought, resulting from seeing sliding scale discounts as pitting your client’s interest (getting the best therapy at the lowest price) against your own (providing the best therapy while maintaining sufficient profitability). Here are some thoughts on how you can set things up to reframe the sliding scale discussion so it doesn’t trigger your own emotions.

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3 Things to Remember if You Struggle with Raising Your Fees

Setting rates is hard for any solo business owner. I still struggle with it myself. A few weeks ago, a new client asked for help with something he was working on, and I didn’t think he could afford my full rate. Ultimately, he asked for a discount for the first few hours and paid my full rate after that. So many therapists also struggle when it comes to setting their fees, agonizing that some clients may be left suffering because they can’t afford therapy. While such concerns prove your empathy, in the final analysis they serve neither you nor your clients. In the following, I point out three things that can help you win this struggle within yourself.

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Lessons from My Accidental Journey into Entrepreneurship

Have you ever found yourself in a job where you’re required to do things you don’t care to do, paid less than you’re worth and less than others in similar positions, underappreciated by your supervisor, and with no path forward? That’s exactly how I felt. Despite years of attempts to change things without leaving, or to find a position at a different institution, I couldn’t seem to get unstuck. After 16 years with a mostly stagnant salary, fear was stopping me from making the sort of radical change that was my only hope. This was not a situation unique to me, and my journey from that low holds some important lessons about entrepreneurship and starting your own private practice.

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What Does the new Tax Law Mean for Your Therapy Practice

The US tax code is infamous for its complexity, and the 2017 Tax Cuts and Jobs Act (love it or hate it) makes things even more complicated than before for therapists in private practice. Does the new 20% deduction apply to therapy practices set up as sole proprietorships? LLCs? PLLCs? S-corps? Is a therapy practice considered a Specified Service Business? If it is, does this mean you don’t get the 20% deduction? Does the 20% deduction apply to all your income from a pass-through business? What is a pass-through business anyway? Since my wife is a therapist in private practice and I’m a consultant in private practice, I’ve been researching all these questions and more, and want to try and make sense of this mess for all of us. Based on that research, and vetted by my own CPA, here are the most important implications for your therapy practice in just seven questions and answers.

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How to Make Your Kid a Tax-Free Millionaire

Year-end is a good time to think about your taxes, especially in a year that saw the biggest changes (like them or not) to our federal tax code in more than a generation. The famous (and often misattributed) quote goes, “‘Tis impossible to be sure of any thing but death and taxes.” (Christopher Bullock, 1716). More than 200 years later, medical researchers keep trying to disprove the certainty of the former, while Washington DC keeps proving that of the latter. A while back, I found a loophole that lets you legally help your teenager become a millionaire without his or her paying a dime of income tax, for less than $20,000! This loophole seems to be unaffected by the new tax law, and I can show exactly how to take advantage of it.

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Holidays Checklist for Your Practice

You know the old saying, "Can’t see the forest for the trees"? Holidays serve a really important purpose for us humans, beyond any religious or cultural reason. They help demarcate our lives, and give us an opportunity to stop, take stock, and see our context (the forest), rather than just the day-to-day details of our lives (the trees). So, what should you be doing this Holiday season, looking at your practice's big picture, to ensure next year is a success?

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Avoid Tax-Time Sticker Shock

Does writing checks for taxes out of your personal account feel like the government is violating your personal finances? For me, once money is in my personal account, I want to know that I can count on it to pay for the mortgage, groceries, and yes, even the occasional vacation. I don’t want to ever write a check to the US Treasury and realize that I just emptied out my checking account so I need to scramble to cover our expenses. Here's how I guided a client to address these concerns.

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Plug the Money Leaks in Your Practice

When you think about it, water can be a good metaphor for money in your practice. It flows in and out, once you use it it’s gone, and without it your business withers and dies. Unless you’re a business mega-star (I’m not), your business has a bunch of money leaks that leave your practice thirstier than it needs to be. Do you know where these money leaks are in your practice?

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Figure Out Your Perfect Office Space Solution in under 5 Minutes

Rent is the biggest budget item for many practices, so you need to choose the right space solution. My wife Risa started by renting daily office space and gradually worked her way up to where we now own our office suite and rent out excess space to other clinicians. This means that not only have we seen it all, we’ve experienced most of it firsthand. Based on that experience, we've come up with a few simple questions that will guide you in figuring out what your own perfect space solution will be.

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The Best Way to Pay Off all Your Debt

We’ve all been there. Student loans to help pay for tuition, a business loan to help rent an office space and furnish it before you see any paying clients, or credit card debt to cover expenses while you start building your practice – it’s tough to get your education and start a practice without incurring debt, and usually many sorts of debt. If that describes you, what’s the best way to pay off all that debt?

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Financial Myths that Can Hurt Your Practice – Expensive CEUs

Mark Twain is quoted as having said, “It's not what you don't know that kills you, it's what you know for sure that ain't true.” So, what is it that you know for sure that ain’t true about the business of your practice? Let's start with the CEU. You know, that pesky requirement that catches you unaware at the end of the year because you forgot to plan for it?

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11 more Ways to Make Your Solo Practice more Profitable - Services

These 11 tips are based on lessons my wife Risa and I learned on how to reduce our costs for business services while running her therapy practice and my consulting business. You can use these to cut your own practice's costs and increase your profits. For example, we see health insurance as an affordable means to prevent financial ruin, not a way to avoid paying for any health services. That lets us buy much cheaper coverage.

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Next 11 Ways to Make Your Solo Practice more Profitable – Financial Wisdom

Like my wife Risa, I’m sure you work very hard to make a difference for your clients, which makes it that much harder to focus on keeping your practice profitable. Here are 11 more tips to make smart financial choices that will help do that. This isn't about pinching pennies, but rather cutting where you can do so without being miserable, so you have more money to invest in bringing in clients, making a difference for them, and making your own life simpler and easier.

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First 12 Tips Guaranteed to Make Your Practice more Profitable – Your Space

From our experience with my wife Risa’s practice, I’m sure you often feel overwhelmed trying to not only make a difference for your clients, but also juggle all the hats you have to wear to make your practice profitable. Here are 12 tips to make smart choices about your space that will increase your profit. This is not about pinching pennies, but rather cutting where it makes sense so you have more money to invest in bringing in clients and making your life simpler and easier.

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You CAN Recover from Slowdowns in Client Traffic

It’s a fact of life – slowdowns in client traffic are a matter of when, not if. However, there’s no reason why such a slowdown should lead to financial or business ruin. In fact, it may be a blessing in (albeit very effective) disguise! When a slowdown come knocking at your door, if you respond by keeping a positive outlook and taking immediate and effective action, you may find yourself piercing its frightening disguise and seeing it for the opportunity it hides.

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Retirement Plans for Solo Practitioners

Retirement plans are an important topic for solo practitioners, which I plan to cover more fully in my upcoming video course. However, I don’t want to hold off

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Business Budget Sanity Check

For the purpose of this post, you’ll need to refer to my free “Set Your Rates the Right Way” worksheet. In the sheet, fill in the blanks on page 4 with your numbers, referring as needed to the sample sheet on the following page (if you have questions or comments, post those at the bottom of this related post and I promise to respond). After filling in your numbers, compare them to the sample entries. Unless you simply copied entries over, I’d bet a nickel your budget is very different.

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Why Free Isn’t Always so Great

It almost seems like you can get something free anywhere you turn these days. That’s because people don’t hesitate to accept something for free, where they may be very reluctant to pay for it. It’s no surprise that the threshold for saying “yes” to something is much lower if it’s free. If you’re trying to establish yourself in a new niche, offering something for free allows you to reach a wider audience, which is great. And if you make that giveaway really valuable, it helps you establish credibility with that audience, which is even better.

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Choosing the Right Business Entity Type

Business entity? Really? Don’t I have more urgent and important things to deal with? That would have been my response when I started my first small business. The problem with that response is that when you start a business, you don’t get to not choose a business entity type. Either you choose it yourself, or it’s chosen for you by default.

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Set Your Rates the Right Way

If you’re a mental health provider, grad school taught you all about how to be a clinician. You learned to diagnose and treat the seemingly endless variety of ways in which we humans make a mess of our emotions and those of our loved ones. Then, you learned how to implement all that knowledge in a clinical setting through supervised therapy, learning from teachers, supervisors, and mentors, perfecting your ability to provide therapy. What you probably did not study nearly as much (if at all) is how to run your practice as a business. One aspect, the one that determines how much money your practice brings in, is setting your rates.

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