Your Money Issues. Plan For Lean Times: Part 4 of 5

If you’ve got a private practice, you've got a very small business. That means that if 5 clients graduate from your practice in the same month, you’ve lost a big chunk of your income. If you get sick and need to miss a week of work, you’ve lost a big chunk of your income for that month. If referrals slow down for a period of time, you may have a lean month.

 The first time my therapy practice declined, I panicked. My inner critic let me have it, and I didn’t have enough experience to know that this was one lean moment in a growing business. Because I didn’t have that perspective, I also didn’t know how to make practical decisions about my business. I’m happy to say that I don’t panic in my business anymore. I know how to plan for the leaner times.

You can plan for those lean times too. How do you do that? 

I’ve got a mindset answer and a practical answer.

Here's the mindset answer.

You’ve got to learn not to take it personally when you’re in lean times. You’ve got to learn not to panic and not to make any impulsive decisions based on that panic. Your inner critic will grab on to lean times as an opportunity to let you have it.

 Here’s some of the (stupid) stuff your inner critic might say:

  • You were silly to think this would work out.
  • You’re never going to make this work.
  • This is the beginning of the end for you.
  • This decline in income is a reflection of your value.

Here’s the mindset you need:

  • I’ve got a strategy to make this business work.
  • I expected this to happen, and I can handle it.
  • This is a blip in a long-term business.
  • There may be something to learn from this, but it isn’t about my value.

In order to move towards that mindset, get support from a coach or from people in your life who have succeeded in business.

Now for the practical answer.

Plan for cancellations, illness, vacation, and attrition.

Cushion your schedule so that you have more openings than you may think you need. This helps you make up for those times when you will have fewer sessions. Plan to have a few more sessions than you think you need to meet your income goals. Plan to make 10 or 20% more than your goal, and that will make up for the months when you don’t hit your goal. 

Have an emergency fund.

 Financial wizard Suze Orman often says that people need at least a 6-month emergency fund. Your private practice needs its own emergency fund. As soon as your practice is full, start putting away just a little bit each month until you have at least 2 months of practice income saved. That cushion will help you make good decisions when the next lean time comes. You’re not likely to lose all of your practice income at once, so a 2-month fund will take you a long way.

Maintain your boundaries and your policies in lean times.

Don’t get loose with your policies or fees in an attempt to keep or bring in clients. Those mistakes will only make it harder to build and maintain a solid practice.

 Use your lean months to market your practice.

I talked last week about the importance of investing in your practice. In lean months, don’t cut back on marketing. When you’re sick, you eat the healthiest food so that you can get well quickly. Treat the lean times in your practice that way too.

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