Private Practice Success

Key Elements for Private Practice Success

Private practice can be a rewarding career choice if you understand and implement the key aspects of the business side of practice. When referrals are plentiful, you can focus on what brought you into this field in the first place: practicing your craft and helping people. As practicing psychologists for over twenty years and business coaches for psychotherapists for the past six years, we’ve studied these issues intensively – and have repeatedly heard about the most frequent challenges that private practitioners encounter when starting, developing or expanding a private practice. In this article, we’ll review what we’ve found to be the most important factors for private practice success.


In order to be successful, many of us need to review and replace at least some beliefs or ideas we’ve learned (consciously or otherwise) about money, prosperity, service and business. Here are the top beliefs that successful practitioners tend to have:

  1. It is OK for helping professionals to charge clients a reasonable fee, and to make a very good living doing so.
  2. Providing a useful service is compatible with being financial successful. Being successful does not mean you are any less dedicated to helping people. The truth is that the more successful you are, the more people you can help.
  3. The work we do is very valuable. We need to recognize the substantial benefits it can provide to individuals, families and communities and the world.
  4. Being a good clinician is a necessary but not sufficient condition for having a successful practice. In fact, a mediocre clinician who is good at business and marketing will likely financially outperform an exceptional clinician who does not effectively promote their practice.
  5. Clinicians who approach their practices as a small business will be more successful than those who treat it as a “hobby” or even a “calling”. This implies thinking like a businessperson, not like a clinician. They are not the same.
  6. Promoting a specialty is more likely to lead to a successful practice vs. a “generalist” practice, and will still enable you to enjoy a diverse caseload.
  7. Consistent, diversified marketing can generate a steady flow of new clients/patients, thereby avoiding the “feast or famine” cycle.
  8. Promoting your practice is a necessary condition for success in the 21st century. The days of ‘if you build it, they will come’ are long gone. You are a small business owner, and every small business owner must sell their products or services.
  9. You have many talents beyond just performing psychotherapy. Allow the knowledge and wisdom you have learned to manifest itself in different ways as part of your practice offerings.
  10. Setting aside regular time every week for working “on” your practice is as important as working “in” your practice. Working “on” your practice is not just something to do when you have a slow day or week but rather needs to be an integral part of your schedule.


Here are some of the top business concepts we’ve found most helpful in creating a successful business mindset for private practice:

  1. Track Your Results – many clinicians have only a vague idea about how their practice is doing and where their referrals come from. The more precisely you can gather this information, the better able you are to make good choices for future growth. When it comes to money, we all tend to catastrophize when things are slow and be overly optimistic when things are going well. Neither attitude leads to sound judgment. Start by keeping data on inquiries – how they found you, questions they ask about you and your practice, reasons why they decide not to schedule an appointment with you, number of visits each week, along with cancellations, your average fee and average length of treatment.
  2. Determine the Lifetime Value of a Referral – this is a very useful statistic which can serve as a benchmark for investing in your practice growth. Multiply your average fee by the average number of visits (note: 10 visits is an average for mental health practitioners identified in many national studies). You will usually come up with a number from $800 – $1200 (yours may be higher of course). Psychotherapy visit length is a highly skewed distribution, so this number may not apply to any one referral, but over time it is a very stable number.
  3. Apply the Lifetime Value of a Referral – Knowing this number will likely allow you to compute your likely return on investment when deciding whether a marketing plan or training is likely to pay off. For instance, if your Lifetime Value of a Referral is $1200, and you do something to promote your practice which costs you $600, it would take only one new client who hears from you this way to earn a 100% return on your investment.
  4. Diversify your Services – don’t except to succeed offering only one or two services. Every successful business has a range of products, in different price points. For example, does Apple offer only one type of iPod or computer? You can likewise diversify your services to attract a wider range of people at different levels of money and time commitment. Offer different types of and techniques of therapy; lectures; workshops; assessments; audio; video; DVD etc. And once someone has tried one of your services, they are much more likely to use another, with zero marketing costs to you.
  5. Try Small Experiments and Carefully Measure the Results – implement new ideas on a regular basis. Invest small amounts of time and money to test a new idea. Expect that many of them will fail! But by expanding the ones that succeed, you will continue to infuse your practice with new income streams and avenues of growth. If you haven’t failed at something lately, you’re not stretching enough.
  6. Create a Business Plan – too many clinicians have a vague plan for “more clients” or “more income”. Successful business owners know that she who fails to plan, plans to fail. Make a specific, measureable plan for what you want to accomplish in the next six months, and the next year. Then work backwards and list the actions necessary to accomplish those goals in that time frame. What resources, actions, staff, and/or knowledge will you need to acquire or outsource to accomplish your goals? Put it all in your Business Plan, and review and update the plan monthly.
  7. Delegate Clerical Tasks – your time is far too valuable to spend on clerical tasks such as making copies, sending faxes, creating files, making or changing appointments, and entering names and addresses into your computer. Hire someone else to do those tasks so you can focus on generating more referrals and expanding your services. The reality? One new referral a month will more than pay for a part time office person.


For many clinicians, marketing is a dirty word that evokes visions of manipulative, dishonest, annoying, pushy salespeople. The good news is that marketing can be done ethically, with integrity, by professionals promoting a valuable service. It is not manipulative to let people know that you can help them with their behavioral, emotional or relational challenges. It IS manipulative if you lie or mislead a potential client about how you can help them.

So what then is marketing? Marketing is simply the process of identifying the needs and concerns of your clients, and seeing if there is a match between their needs and the benefits that you can offer them as a psychotherapist. From this perspective, marketing is not something you do to others, but is a collaborative process you engage in with others.

There are basically two ways in which you can market your practice: Community Networking and Internet Marketing. Here are some tips for each of these methods:


Building up referral sources in your local community tends to take time, but can provide a very inexpensive stream of steady referrals. There are four primary sources for generating referrals in this manner:

  1. Past and current clients are the most frequently neglected source of referrals by practitioners and small businesses.
  2. Other professionals can be a great source of referrals. These include professionals who are not in direct competition with you, and include clinicians who have different areas of specialization than yours, as well as medical, legal, educational, dental and other healing professions.
  3. The media is always looking for stories and can give your practice a great boost with an article or radio or TV segment on your area of specialization.
  4. Getting out in the community and presenting your ideas to prospective clients can be a great way of generating word of mouth referrals in your community. You can reach these people through traditional print advertising, public lectures, workshops, and free telephone consultations.


The Internet continues to a rich source of referrals to private practice. Over 75% of people use the Internet first when searching for a professional service – and the percentage goes up the more education and income the person has. Basic concepts of Internet Marketing success are shown below.

  1. You must establish a diversified, searchable online presence to generate referrals from the Internet. Websites serve this function better than blogs for most practitioners. Not having a website pegs you as an out-of-date dinosaur.
  2. Your website should be optimized for local search. This tends to be much more important than how pretty your site looks.
  3. Your website must generate steady visitors and then convert a percentage of those visitors to phone calls or emails to you.
  4. People online have very short attention spans. In most cases you have less than 30 seconds of someone’s attention to convince them to read more about your services. Using audio or video can greatly enhance a visitor’s attention and emotional engagement when on your website.
  5. Therapist directories like Good Therapy and Psychology Today can be good marketing tools. However, referrals from these types of services have slowed down significantly due to having no limits on the number of practitioners listed in each geographic area.
  6. Social Networking presents many challenges to the boundaries most psychologists want to maintain between themselves and current or potential clients. Nonetheless, there are ways to use services such as Facebook to promote your practice and take advantage of the enormous numbers of people on those sites.


We in private practice are subject to the same market forces as any other small business. Around 2/3 of small businesses fail within the first five years. Clinicians primarily fail for one of two reasons: 1) they think their excellent clinical skills are enough to generate steady word-of-mouth referrals; or 2) they think that because they are an intelligent, competent person, they can “figure out” the business stuff on their own. Unfortunately for most of us, neither is true: we can’t succeed purely on our reputations, and after naively jumping in feet-first, we quickly learn that business is a complex, sophisticated field of study in its own right. After all these years and dollars devoted to our clinical training, it’s not enough.

But there is a silver lining to these depressing realities. At its core, business is really all about psychology. That makes it a fascinating area to study, in addition to being the missing piece that unlocks the key to private practice success.

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