There are reasons to start a new practice and reasons not to. Here we look at eight reasons not to create a new mental health practice. The consequences of a false start can be massive and long-lasting. Therefore, any one of these reasons could be a disqualifier. So weigh each of these carefully.
Table of contents
- Significant reasons to NOT start a new practice
- 1. You have a good thing going where you are
- 2. Living a complicated life
- 3. Intolerant of financial risks
- 4. Quickly paralyzed and then stayed stuck there
- 5. Struggle to keep me organized
- 6. Making money
- Beyond solo practice
- 7. Passion for managing and leading people
- 8. Marketing on behalf of others
- The decision to start a new practice or not
Significant reasons to NOT start a new practice
1. You have a good thing going where you are
If you are enjoying your current situation, why make a change? Good employment opportunities are not the easiest to find. So unless you see significant struggles where you are, stay put.
In some cases, as time goes on, you may discover issues that you think might be addressed by a move. Consider the option of launching out into a new venture then.
2. Living a complicated life
Starting a new practice takes far more out of the owner than most people estimate. And unless you have a significant margin in your life, staying put can be the wisest choice.
Every new owner will tell you that the effort required to get to stability is far more than they thought. Every. Single. New owner. So don’t do it if your personal life is not in excellent shape.
Specifically, the early years of the business will take time from your evenings and weekends. And even when you are home, you will be preoccupied with a wide range of issues to sort out and problems to solve. The juggling act is massive. In those early years, one must:
- Continue to deliver excellent therapy
- Grow all the parts of the practice
- Hone your skills as a manager
And meanwhile, you have a life to live at home. Consider these posts before taking the plunge:
- Mandatory owner’s skills: How to know if you have what it takes
- Business success: What does it take?
- Why effective leadership is lonely and exhausting
3. Intolerant of financial risks
The start of a new practice is inherently risky.
The start of a new practice is inherently risky. For example:
According to the U.S. Bureau of Labor Statistics (BLS) . . . shows that approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. Only 25% of new businesses make it to 15 years or more.
What Percentage of Businesses Fail in the First Year? Freshbooks. 03/02/2021
Certainly, the owner is the most significant factor in that practice’s success. Moreover, even the best organizations face unexpected and scary setbacks. For more posts on some setbacks, see:
- Growing pains: Overcoming crises–When several clinicians leave
- Psychotherapy practice finances in a crisis
- How mental health businesses weathered the health care storms
- Leading during crises: Passing the Coronavirus test
If you have a history that sensitizes you to financial risk, take a long and cautious look before launching. Certainly, anxiety about finances goes with ownership. So the ability to tolerance reasonable risk can make all the difference in one’s peace of mind.
4. Quickly paralyzed and then stayed stuck there
How do you respond when something unexpected happens? If your neck-jerk reaction is to freeze up, ownership may not be for you. That is especially true if you tend to stay stuck or procrastinate on facing challenges.
On the other hand, if you tend to get motivated and activated by challenges, then ownership might provide the stimulation that works for you. The key here is an honest assessment of your default reactions.
5. Struggle to keep me organized
Once one has launched a new venture, all decisions and activity dependents upon you. There is no one to delegate to or lean on. So how you manage yourself becomes the name of the game.
One of the most common reasons that I hear from clinicians for moving from one practice to another is disorganized leadership. The lack of organization erodes employees’ confidence in how details are handled. In these posts, I talk about several key leadership traits, such as responsiveness:
- Five key attributes of excellent managers
- Learning to manage myself: Solving my self-imposed roller coaster
6. Making money
Does owning a practice mean you will make more money than working for someone else? In truth, it depends. Say you have a current arrangement where you pay 40% of your collections to the practice. One would think that holding on to 100% of collections would be more than cover additional expenses. Sometimes, that is true, but not always. I have written quite a bit on this subject. For example, check out these:
- Wealth in mental health–Why isn’t there more?
- How to calculate a psychotherapist’s private practice pay
- Follow the money: Therapist pay in private practice
- Most hazardous practice size? Ten people
Furthermore, I have talked with many practice owners who were not the top earner in their practices. And in some cases, they took a salary cut to pay the bills. There is money to be made, but it certainly is not automatic. See these:
- Wealth in mental health–Where are the good-paying jobs?
- Financial rewards for owners of private practices
Beyond solo practice
There are two additional hazards in starting a new practice. These grow out of your practice’s success.
Eventually, if you do things right, you will generate too much demand for your services to handle it yourself. When that happens, there are two options:
- Hire others to work with you
- Refer out to others who are not part of your practice
Expanding your staff requires you to learn how to recruit, hire, train, manage, and supervise employees. Additionally, you have to build out the infrastructure that your employees will need to do their work. And subsequently, you will need to provide leadership and direction your expanding organization will require.
Alternatively, referring out means that you do not benefit from your efforts to generate a connection to that potential client. You are giving those connections away to another practice.
7. Passion for managing and leading people
Do yourself a favor. Do not hire employees if you do not have a passion for managing and leading people. You will merely be setting yourself up for loads of misery.
Growing your practice beyond a solo practice will push you to a whole set of tasks that one loves or hates. Here is a sample of some of the more challenging parts that come with growth, leadership, and management:
- When we need to fire an employee
- Growing pains: Overcoming crises–When several clinicians leave
- Psychotherapy practice finances in a crisis
- Most hazardous practice size? Ten people
- Grow hire, run out of space, repeat . . . forever
- A different language: What tracking numbers can tell us
- The ultimate guide to building your staff and culture
8. Marketing on behalf of others
Marketing is hard for most of us. And as you grow, you will find that some employees resist joining any marketing program you might create. In my previous practice, we developed many methods for encouraging employees to participate in the marketing efforts. See, for example, these posts:
- The five best marketing favorites in psychotherapy practice
- A community-based marketing method: Community Connection Plans
- How to convert solid referral relationships into fan clubs
- Why therapists should not outsource marketing: We do it better
However, despite our best efforts, not all employees would participate. Consequently, since no manager can make people do what they do not want to do, the task will fall to the owner to lead the way. After all, the owner has the most skin in the game for the practice’s success. If you are going to resent the situation, then perhaps ownership is not for you.
The decision to start a new practice or not
To sum up, I have explored eight reasons not to start a new practice. In short, don’t do it if you:
- have a good thing going already
- live a complicated life with little extra energy for a new practice
- are intolerant of financial risk
- get easily stuck and unable to move through challenges
- struggle to keep yourself organized and on top of things
- are expecting a significant increase in your income from the endeavor
- do not have a passion for managing and leading a staff
- will resent marketing on behalf of others