In this episode of the Practice of Therapy Podcast, Gordon goes solo and talks about his recent invite to Joe Sanok’s Killin’ It Camp. Then, we find out why Gordon wants to assist others with their finances and the number one reason most private practices fail. Later, Gordon helps with analyzing current finances, and we discover why Gordon is on an insurance panel. Lastly, we learn how to break down our expenses, profit, and taxes.
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Gordon’s “Why”
Gordon reveals his “why” for wanting to assist others with their finances. Then, Gordon divulges the number one reason most private practices fail because the owners have not prepared themselves financially for owning a business. Also, owners do not put the proper systems in place to fully understand how businesses work. Most private practices go under because the owners are worried about money, paying the bills, and financial stability.
Analyzing Current Finances
Every private practice needs clients to see. Without clients, you will not be able to make money. The marketing aspect of finance depends on the number of referrals you acquire. Most private practices will make money from their referrals. Especially if your business is in the beginning stages, often owners will overload themselves with clients and be overworked.
The other side of your finances is the expense side, or what it costs to maintain your practice. Gordon says there is not much overhead in a service-based business. Some common expenses for private practice include internet, furniture, electricity, and phone bills. The other aspect of operating your business is maintaining a website so people can find you and make appointments. Also, if you are in a group practice, you will need to keep your labor expenses in mind.
Gordon reveals he is insurance based because of the demographics in his neighborhood. The area he lives in pretty much demands insurance panels. Without insurance, Gordon says it would be an uphill battle to get the clients he needs. Many of his clients depend on insurance, so it was a no-brainer for Gordon to be on an insurance panel. Your pay will depend on which insurance company you use. Usually, private practices that use insurance panels will have to see more clients than private paid practices.
Break It Down
Gordon suggests breaking down what it costs you to run your business per client and also find out what your average per session rate is. Gordon says you can do a lot of analysis just knowing these two figures. These figures will help you predict your cash flow and assist you in making future plans. Also
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