Over the last few years, Al and I (Kong & Way) have worked with countless private practice owners (mainly psychologists), ranging from startups, well-established practice owners, and those considering the private practice journey. Whatever stage of the journey they are on, there is one consistent comment that keeps coming up – “Private practice is not how I expected it to be.

Sometimes they were amazing and rewarding surprises and other times they’ve been downright motivation-crushing experiences.

These misconceptions about private practice can have several consequences:

  • They could inhibit you from starting your own practice.
  • On the other hand, they can make you jump into private practice without preparation.
  • They can disappoint and demotivate you if things don’t seem to be going as well as you expected.
  • They could make you waste money and time on things that don’t really contribute to your practice.

I’ve put together a list of the most common misconceptions people have about running a private practice in our experience. I hope this can help to manage your expectations if you’re considering starting a practice. Or, if you’re currently navigating through these unexpected surprises, then you can be rest assured that you’re not the only one!

 

#1. If I’m good, people will come to me.

The biggest and most common misconception about running a private practice is that “if you build it, they will come.” When, in fact, finding a consistent source of referrals is one of the most talked about things with private practice owners.

 

#2. Word-of-mouth is all that matters.

In a similar vein, many practitioners go into private practice thinking they won’t need to familiarise themselves with traditional advertising methods. It comes from the belief that private practice is a different “breed” of business, where word-of-mouth referrals matter more than anything else.

However, private practice is business and it needs a variety of marketing methods to bring in new clients through the door. This is especially important because it’s not easy to influence word-of-mouth marketing from where you’re sitting.

 

#3. The more clients I see, the more money I earn.

It seems like easy math, of “work more and earn more”. But that’s not always the case in private practice. With an imbalance in the types of appointments you take on, the session fees and your overheads, you could make little to no benefit, or even end up losing money as your client volume goes up.

Play around with our comprehensive weekly and annual revenue calculator to see how different session rates can affect your bottom line!

 

#4. My only real expense will be leasing an office space.

Don’t worry if you think (or thought) this. Underestimating business expenses is by far one of the biggest culprits of business stress in any industry. This can break some startups if you don’t leave enough wiggle room in your cash flow, so remember to always overestimate your expenses.

In private practice, an office space may be the largest ongoing expense, but is by no means the only thing you need to make room for. Think about your insurance, practice management software, business consulting, marketing, website costs… The list goes on, and they can easily become thousands per month.

 

#5. I can’t start my own practice without a huge savings account.

The previous point all points to this conclusion. It seems to make sense that if running a private practice is so expensive then you can’t afford to start it without being able to afford them all. Well, yes, to some extent.

But don’t let it crush your spirit! You don’t always have to start with a huge physical and digital presence. There are ways to gradually build your practice with minimal expenses, including starting with a home practice and paying off big overheads as you go.

Also, keep in mind that you don’t always have to start with 100% of the costs of everything. For example, just because your annual marketing fees are $10,000, doesn’t mean you need to have it at the start of the year. Strategise your payments and their frequency, and you’ll find that you don’t necessarily need as much to start with as you thought. Use our cash flow template to estimate your cash balance on a monthly basis!

 

#6. My hourly rate will be almost as much as my session rate.

Hourly Rate ≠ Session Rate

If your financial forecasts are based on the misconception that they’re equal, then stop everything now and use this simple revenue calculator!

Your bottom line revenue is the result after factoring in the following:

  • Availability
  • Billable hours percentage
  • Client sessions
  • Accurate and timely payments
  • Cancellations and no shows
  • Admin hours
  • Business tasks.

So, if you’re simply thinking, “I can work 50 hours a week and I’ll charge $XX per session so I can earn $XX times 50…” you’re not getting an accurate representation of your potential revenue.

 

#7. It takes a long time (5+ years) to build a successful full-time practice.

Like any business, a private practice’s success journey depends on how you go about managing it. If you work smart, engage in local and digital marketing and have the right type of help around you, it is more than possible to build a successful and busy practice in the first couple of years.

To speed up your journey and avoid preventable mistakes, talk to a private practice business consultant and/or marketing specialist.

 

#8. My practice needs to serve as many types of people as possible so I don’t miss out on clients.

A common myth about running a private practice (or any business for that matter) is that it needs to be able to serve all possible client types. This seems like a good idea and can work for some, but can also waste a lot of your time and resources on the parts of your business that you don’t feel confident in or passionate about.

It’s OK to turn away some clients because you can’t service them. Better yet, refer them to another practice (yes, your competitors!) and build your referral relationships.

It’s like going to a quiet restaurant and seeing pages upon pages of menu items, all with vastly different ingredients. How good are their seafood dishes compared to chicken? How do their ingredients stay fresh? What’s their best dish, or the chef’s favourite?

While you don’t need to pick a narrow niche area, you also don’t need to aim to serve all types of clients and presenting problems. Don’t let your Fear of Missing Out drive your business!

 

#9. If I become too business-minded, I’ll no longer be an altruistic practitioner.

(I’ll have to abandon my values to become successful.)

This is a common worry amongst mental health practitioners. It’s easy to assume that practitioners who run successful practices are more money-focused than client-focused. But that can’t be further from the truth.

In fact, being ethically responsible and client-focused is absolutely essential to running a successful private practice. This is because private practice is a people business. Its reputation and success depend on its ability to provide great client care and build lasting and strong relationships with their client base. This means that a money-hungry practice that takes shortcuts and sacrifices client care most likely won’t survive long term.

 

Which of these misconceptions about private practice did you have, and did your actual experience meet these expectations? Or, if you’re currently considering starting your own practice, which of the 9 misconceptions worry you the most? Do you have any other worries or beliefs that you want dispelled? Share them in the comments below or talk to us for advice specific to your needs!