While some counselors today are reaching for their pens and notepads, others are reaching for their laptops. With the help of Electronic Health Record (EHR) and Practice Management (PM) software, counselors are trashing their metal filing cabinets and announcing that they’re “going green!” Eco-friendship aside, a good EHR-PM program can help a practice to organize files, improve treatment planning, measure client sessions and attrition, monitor client balances and accounts receivable, track authorizations, file insurance claims, schedule appointments, and more…or at least that’s what it says on the box!

The technological learning curve aside, counselors today face numerous roadblocks implementing EHR-PM software into their practices. This column will address those roadblocks, and share the experiences of several counselors’ journey into the paperless.

Roadblock One: The Cost

“Go paperless and earn up to $44,000 in incentives.” This is the sales pitch of many EHR software companies today. And it’s true. In 2009, President Obama signed into law the Health Information Technology for Economic and Clinical Health Act (HITECH). Under HITECH, qualified providers can receive up to $44,000 in Medicare bonus incentives if they demonstrate the “meaningful use” of an EHR system.

But wait…did you catch that? Medicare. Counselors can’t accept Medicare! In fact, even if they could, a “qualified provider” is a physician—not an LPC. Unfortunately, the HITECH stimulus package doesn’t account for mental health professionals trying to turn the electronic corner. Worse yet, the generous incentives have served to inflate the price of EHR programs across the board. This makes sense when considering that even if an EHR-PM software suite costs $50,000, a group practice of four MDs will still turn a 6-figure bonus for implementing the EHR-PM software.

Journey into the Paperless

Wendy Molinaroli, a counselor in Charleston SC, is no stranger to EHR. In fact, she’s been looking for suitable software for her solo private practice since 2000, and has logged hundreds of hours in the search. One of her findings: most EHR-PM programs are priced too high for counselors. For example:

• Amazing Charts: $1999 per year for the first provider, $995 for each additional provider.
• All Scripts: $699 per month per doctoral-level provider, $474 for masters level.
• Soapware: $3000.00 per year, per provider.
• Praxis: $6995.00 per year for the first provider, $2995.00 for each additional provider.
• AdvancedMD: Nearly $1000 per month, per provider.

What’s notable is that many programs aren’t just expensive; the prices are incompatible with counseling practices of any size. Specifically, the rates are so high on a per-user basis, that even if a group counseling practice made infinity dollars, the practice still would not be able to afford the per-user cost because masters-level clinicians don’t bill enough to justify a software fee of several hundred (or thousand) dollars a month (this is particularly true for practices that include part-time clinicians). 

Roadblock Two: Software Problems

Fred Porter*, owner of a New England psychiatry practice paid thousands to get started with his web based EHR-PM program. But when he loaded his patient list of several thousand into the system, it slowed to a crawl. Fred explains, “We would watch the appointment calendar load, one line of text at a time. It could take 10 minutes to check a patient in.” In addition, there were state specific regulations for filing insurance claims that the out of state software vendor wasn’t used to—so claims were getting denied. And so began a ritual for Fred, of finding bugs and calling the software company to try and get them fixed. Fred explains, “If you deal with a larger company like Siemens you won’t have delays, and they have experience with practices nationwide; but a small practice can’t afford that. So I’d call them and say ‘this or that doesn’t work’ and they’d say they’d look into it—it felt to me like I was teaching the vendor.” A month into his implementation, Fred received an unexpected bill in the mail for customer support! “I couldn’t believe it—I’m helping them fix their software. But what are you going to do? Once you’ve committed to a program, had it installed, trained your staff—it’s a nightmare to switch. They not only have all your data, all your insurance claims are in their software!”

It’s hard to believe the lack of viable programs when an Internet search will turn up pages of results. In the last year, Wendy and I have both test-driven dozens of programs, sharing our notes (and disappointments) about each. Names have been removed to protect the guilty, but the problems are numerous, pervasive, and render many EHR-PM software options on the market unusable. Here are some of the problems we encountered:

• Help tickets go unanswered
• Software has downtime
• Software is cripplingly slow
• Broken features
• Basic features missing
• A difficult to use interface
• Billing claims sent improperly, or not at all
• Billing claims sent repeatedly (in error)
• Reports are faulty, or altogether unavailable.

Wendy explains, “Some software is okay on the notes [EHR] side, but the practice management and billing side is poor. Some software is the other way around. No one seems to have a complete usable package.”

Making it Work

Ryan Neace, a Central VA based counselor, has gone paperless without the use of EHR software. In his practice, every therapy office is assigned its own iPad, on which is loaded a simple note-taking program called “smartNote,” available in the iTunes app store, for $2.99. Ryan explains, “The client files are password protected. Besides that, the application couldn’t be more basic. It can’t run reports, such as sessions booked, and it has no billing capabilities whatsoever. The program works for us because we don’t need much in the realm of reporting, and because we’re a cash-only practice.”

Counselor Wendy is on her fourth software suite in as many years. Her first software had “updating and synching” problems, the second company went out of business, the third software never ran properly (according to Wendy, “they blamed Bill Gates for their software being crappy”), and as for the fourth program, the note-taking side works well, but the PM side has so many serious billing problems that Wendy is being forced to switch software vendors again. Wendy laments, “Even after all my searching, I haven’t found a single software program I could recommend to counselors!”

Fred has stuck it out with his software provider through what he describes as “a year and a half of struggles.” The PM side of the software is working, but he has yet to begin using the EHR. Fred explains, “because the financials weren’t working, I wasn’t going to tie myself to the EHR. I’m already paying for it—I’ve just been reluctant to use it.” He says he feels fortunate that his software developer ‘got it’ and was able to make adjustments to the software. He plans to begin using the EHR soon, and is excited about some other features, such as automated reminder calls. Fred says “Reminder calls keep the no show rates down to 5%, but it takes an enormous amount of resources for receptionists to manually make each call.” As a final issue for Fred, even choosing a small EHR-PM vendor, one ad-on feature is still out of his budget. Fred says, “The electronic prescription writing is a bit expensive. It’s $60 a month per provider. I have 12 prescribers, but some only work one day a week, so I can’t justify the cost.” Still, Fred is positive about the prognosis, saying, “We’re getting there. Slower than I had hoped but we’re getting there…”

As for my practice, we began using EHR-PM software in 2009. We thought that an EHR system would help us to better organize records, and would make records easier to retrieve when clients request them. As director, I also saw value in having a solution that combines note taking with insurance billing.

In choosing an EHR-PM platform, our team sorted through what features would be most helpful for our practice. We wanted to find a web-based program that didn’t need installation on every office computer. This eliminated many options. Price eliminated others. Trying demo-versions of various suites eliminated even more, as many look like a flashback to DOS. In the end, we found a low cost program called “Office Ally” (Cost for EHR is $29.95, plus $15 per provider, per month. The PM software is basically free). 

The team was excited about the program. However, once implementation began, the excitement waned. The software was not nearly as user friendly as we had hoped, and the learning curve was brutal. There is a lot of dialogue during the training process that sounds like: “you need to click here, then here, then click the drop down menu here, and ignore those sections there because those features don’t apply to us.” 

Today, several years into our Office Ally subscription, our staff still dislikes it, as does our in-house billing department, who warns that the software will become decreasingly able to meet our needs as the practice grows. Also, it only works well on Internet Explorer, and it has regular bugs, crashes, and downtime.

In an attempt to phase out Office Ally, in 2011 we tested a new software program with a handful of staff. While the notes side worked well, the PM side was wrought with problems. We are now in the process of implementing a third software program. This time, the practice purchased a higher-priced solution, with hopes that it will lead to better outcomes. In the next year we will be spending north of $10,000 on EHR-PM software (we’ll let you know how it goes).

Despite the troubles, overall EHR-PM software has helped the practice. Note taking has improved, as has the organization of client files. We can view a history of sessions at a glance, and how much has been paid to each clinician from insurance and co-pays. It’s also a nice perk not to have a growing mountain of filing cabinets crowd the office.

No One’s Missing the Boat

Sometimes it’s not worth being at early adopter. As someone who has spent hundreds of hours searching for and testing EHR-PM programs, it’s infuriating to know that at some point in the future—perhaps even soon—there will be a clear industry leader. Choosing software will be quick, easy, and maybe even affordable. So, if you feel like you’re missing the boat on EHR–PM software, you’re not. The boat isn’t even in the water yet!

*name changed

A question I’m often asked by counselors is whether they should specialize. That is, should they focus their counseling practice in a specific area? It’s a hard question to answer, as even successful business people disagree. In this column, I’ll describe four ways that counselors can specialize, and offer some insights into how specializing can help (or hurt) a counseling practice.
There are four areas in which counseling practices can specialize: (1) Populations Served, (2) Problems Treated, (3) Treatment Methods Used, and (4) Business Practices. Each is described below.

1) Populations Served
Children, couples, firefighters, Mormons, Texans, criminals, and Texan criminals: Specializing in a client population means limiting one’s practice to serving a group with an identifying characteristic other than the presenting problem.
This type of specialization is most successful when members of the population are known to limit their search to counselors who work specifically with their population. For example, many Christians will refuse to see a counselor that does not identify him- or herself as a “Christian counselor.” Similarly, executives, GLBTQ clients, and many ethnic groups will seek out therapists with specific expertise in helping persons in their population.
The downside of specializing in a specific population is that one limits their potential client base. A colleague of mine had a website with a header that said, “The Child and Adolescent Experts.” While the specialization helped the practice win both school and court contracts (working with delinquent adolescents), the practice still struggled because the local demand for child therapy was too small. As soon as they expanded their practice to encompass families and couples, their business grew.
Broadening (or diluting) their specialization worked for them. However, it’s also weakened their grip on the child and adolescent market. Since they’re no longer marketing themselves as “the child and adolescent experts,” other practices in town are more able to compete for those clients.

2) Problems Treated
From Social Anxiety Disorder to substance abuse, there is no shortage of psychological problems and life issues in which to specialize.
Specializing in a specific problem is more than simply adding an item to a practice’s menu of disorders treated. It takes commitment to limit one’s practice to a specific problem—and both clients and colleagues tend to respect counselors willing to focus. Moreover, if you choose a problem that the average clinician finds difficult or undesirable, such as severe mental illnesses, autism spectrum disorders, or high-risk clients, the specialization should help to encourage peer-referrals.
Alternatively, if you brand your practice as “the depression specialist,” peer-referrals will likely be sparse. Still, you will gain the attention of potential clients with depression, who may look favorably upon the practice built specifically for their presenting problem.

3) Treatment Methods Used
Treatment methods can include psychoanalysis, Eye Movement Desensitization and Reprocessing (EMDR), Dialectical Behavioral Therapy (DBT), positive psychology, and many more. Specializing in a method of treatment is a good way to recruit the savvy client who knows the type of treatment he/she wants. However, the average client is rarely focused on treatment method.
I often see counselors excited about their EMDR certifications; but less often do I see those certifications become the genesis of a thriving practice. Conversely, I have known of a tight knit community of psychoanalysists who refer within their circles, and seem to have a loyal following of psychoanalysis-seeking clients.
In my own clinical work, rarely (but sometimes) do clients seek me out because of my counseling methodology. Hence, from a business perspective, while there often isn’t a big upside to specializing in a treatment method, there probably isn’t a huge downside either.

4) Business Practices
Walk in appointments, phone or video sessions, at home therapy, 24-hour customer service, high prices, low prices, intern-level counselors: The business decisions that make up a practice’s unique brand identity are limited only by the founder’s imagination (and resources).
But can business practices be a specialization? Yes! If every session is $600, and you offer caviar to your clients, your practice specializes in providing a high-priced, first-class, counseling experience (ok, that’s debatable, but you get the point). If sessions are $40 and lack frills, you specialize in providing an economic counseling option, much like Southwest provides low cost airfare.
Which identity to choose? Customer service is in demand right now, as recent polls show that most consumers are willing to pay more for goods and services in exchange for a great buying experience. Also, some business practices are evergreen—such as affordability and convenience (No one is ever going to say, “I wish this service cost more, and was harder to use.”). Still, to really set your practice apart, clients need an experience that is delightful, memorable, and unique.

Specialization Tips
Below are seven tips based on my experience working with counselors starting new practices.
1. Don’t specialize in Group Therapy
Some counselors, starting out, think that offering group therapy will help them build a caseload. Nothing could be further from the truth. Instead, groups tend to work best when a practice has an over-abundance of incoming clients who want help. For example, a group is a good option if your practice is receiving a never-ending influx of clients who are court-mandated to receive anger management.

2. Avoid Creating a Holistic Health Program
A counselor starting a private practice might get the idea to begin a holistic health program. These programs are usually counseling combined with some number of ancillary services such as yoga, exercise, nutrition, meditation, massage, etc. In addition, they often require some type of upfront commitment from the client to participate. The idea is that by taking a “whole health” approach to care, the practice will become differentiated in the marketplace, and also be more helpful to the clients than psychotherapy alone. However, such programs create a barrier for building a practice, because most prospective clients don’t want to sign up for a program, they just want to try out a normal counseling session.

3. Consider Demand
Before selecting a specialty, try to determine if there is enough demand for what you are offering. Tony Hsieh, CEO of Zappos, states, “In business, one of the most important decisions for an entrepreneur or a CEO to make is what business to be in. It doesn’t matter how flawlessly a business is executed if it’s the wrong business or if it’s in too small a market. Imagine if you were the most efficient manufacturer of seven-fingered gloves. You offer the best selection, the best service, and the best prices for seven-fingered gloves—but if there isn’t a big enough market for what you sell, you won’t get very far.”

4. Stay Consistent
Don’t jump ship on an idea that’s working. In The 22 Immutable Laws of Branding, authors Ries and Ries write, “Consistency built the Little Caesars brand, and lack of consistency is in the process of destroying the Little Caesars brand. “Pizza! Pizza!” became the chain’s rallying cry. Where else could you get two pizzas for the price of one? The power of this branding program made Little Caesars the second-largest pizza chain in America. “Why should we limit ourselves to take-out pizza only?” the bored executives asked. So Little Caesars introduced “Delivery. Delivery.” And promptly fell to third place in sales, after Pizza Hut and Domino’s Pizza.
It gets worse. In order to turn the chain around, Little Caesars went big. The small pizza became a medium-size pizza. The medium-size pizza became a large pizza. And the large pizza became an extra-large pizza. Talk about confusion. “I’d like to order a medium-size pizza, please.”
“Do you want a Pizza Hut medium, which is actually our small size? Or do you want a Little Caesars medium, which is actually a Pizza Hut large?”
“Uh . . . do I still get two pizzas for the price of one?”
“Pizza! Pizza!? No, we don’t do that anymore.”
A pity. Little Caesars had one of the best brands in the pizza category. The only brand focused on takeout. The only brand with an identity and a message. (Pizza! Pizza!) And now it has nothing.”

5. Be the best in the world
In order to have a truly great practice, you need to be best in the world. Sound overwhelming? Don’t worry; this can be both highly focused and location-specific. For example, you could be the best at “providing counseling to single mothers in central Virginia” or “providing CBT to undergraduate students attending Virginia Tech.” When potential clients are looking for a counselor, they are looking for the best option in their world. That is, the best counselor within a few miles, under their budget, who has openings on Thursdays or Saturdays. Jim Collins elaborates, “We confront the brutal facts of what we can—and equally cannot—become the best in the world at, and we do not allow bravado to obscure the truth.” Of what can you be the best in the world? Of what can you not?
6. Take a flyer
If you have a new, creative idea for your practice, but are not sure if it will work—give it a try! Don’t bet the farm on the idea, but don’t play the game so safe that you never take any chances. When starting a practice, a lot of what you do is going to be like throwing handfuls grass into the air and seeing if it catches the wind. Most will just fall to the ground, but every once in a while something will catch air—and take off!
7. Specialization can work in a small town, too
I used to think that in order to succeed in a small city or town, a counseling practice would need to offer broad and general services. However, this isn’t always the case. While there are less people, there may also be fewer clinicians. This past year, I spent a lot of time in a small city. Residents are paying big city prices to meet with the few counselors who are known to be good at couples therapy, or eating disorders. Supply and demand works in small towns, too.

This is a photograph of some of the ACA (American Counseling Association) Bloggers, at the 2012 ACA Conference, in San Francisco.

The ACA blog has about 50 bloggers–counselors and counselors in training–whose articles / blog posts generally reach between 500-2000 readers.

The group is lead by Rebecca Daniel Burke (Middle).

Good Morning–

I am trying to get clarity as to the distinction between counseling “records” and counseling “notes”.  Specifically, I am looking for a simple, easy-to-use format for maintaining records and notes that meets HIPAA requirements, protects my clients, and provides me with the detail I need to maintain continuity between sessions.  I have an individual practice in Idaho.  I do not have office staff and do not bill insurance.  I am finding a range of complex and conflicting advice and debate on this issue, and am feeling insecure about my own system, but also feeling frustrated at not finding anything that is likely to work better.  I would appreciate your input.

Thank you,

Mary O.

ANSWER:

Greetings Mary,

My name is Anthony Centore, I am a private practice consultant for the ACA.

You present good questions in your email! Let’s see if I can help….

First, counseling “notes” and counseling “records” are terms that are often used interchangeably, in casual discussion, but they technically are different. To be more specific, a client’s record would include informed consent documents, intake forms, and perhaps special permissions for the release of information; basically, anything kept on file for a particular client would constitute their record. A client’s counseling “notes” generally refers to their “session progress notes” specifically. A popular format for writing these notes is SOAP, which stands for Subjective, Objective, Assessment, and Plan. 

In regards to finding a system to take and keep notes, you are not alone in your frustration, as finding a good record keeping system is something on a lot of counselors’ minds these days. Fortunately, the task is made somewhat simpler by the fact that you don’t bill insurance.

Mary, for your solo-practice, you could create paper-based notes, using the SOAP format. You could take the notes during and after client sessions, and store them in a double-locked filing cabinet. I would recommend getting a book on setting up your system–to get started. The “Adult Psychotherapy Progress Notes Planner” is a good book that will provide in-depth and step-by-step direction, as well as templates that you can photocopy for your use in your practice (I think the book now also comes with a CD, which contains templates in electronic format).

You can find the book, and others like it, here:

http://www.amazon.com/Adult-Psychotherapy-Progress-Planner-PracticePlanners/dp/0471763446/ref=sr_1_1?ie=UTF8&qid=1331652363&sr=8-1

Mary, if you’d like a more high-tech/paperless solution, there is a nice online solution available (for free!) at PracticeFusion.com (the health record component is free, the billing component costs money–so it’s a great option for you, as you don’t need billing). This is a web-based note-taking/record-keeping program, and also comes with a calendar that you can use to schedule your clients.

Mary, I hope this was helpful. If you have any more questions, please feel free to ask!

Sincerely,

Anthony Centore Ph.D.

Benjamin Franklin is known for his strict schedule. His personal notes show that he was asleep at 10pm, awake at 5am—and he spent most of his waking hours working, or reviewing his tasks.

Starting a counseling practice isn’t a 40-hour a week job. Successful entrepreneurs either “Do the Franklin,” or burn the midnight oil. Or both! This is because an aspiring counselor-entrepreneur must stay relevant with the practice of counseling while learning (and executing) the myriad aspects of running a business (e.g., enacting a business plan, managing finances, setting up an office, getting the word out, etc.).

After a year of hustle…

Once you’ve “done the Franklin,” for about a year, you’ll notice some changes. Your phone is ringing, and your caseload is filling! People will tell you that they’ve read your articles, or saw you on the news. New clients will tell you that they heard you speak, or watched a YouTube video of one of your talks. New clients will tell you that another client, to whom you provided great care and service, referred them!

If all goes well, at some point in year two your caseload will reach 35 sessions a week. At 35 sessions, you’re with clients 26.25 hours a week. You spend 13.75 hours a week on clinical notes and managing your one-office company. You’re working a comfortable 40-hours a week, and bringing home net earnings of six figures a year.

Your private practice is Thriving! And you have options…

1. Stay Small

While nothing needs to change, there are several options for your small practice to consider.

a. Hire administrative help.

Perhaps there are some tasks you wish to delegate: reception and scheduling, billing and bookkeeping, or general office upkeep. This can sometimes be done without reducing net profit.

If a counselor earns $65 per clinical hour, as long as an employee (a) costs less than $65 an hour, and (b) completes their tasks efficiently, an increase in the counselor’s caseload could compensate for the administrative costs. This approach won’t reduce the counselor’s workweek, but will allow the counselor to trade administrative tasks for clinical work.

b. Raise your rates.

Your caseload is full, and you’re even turning some clients away because you’re too full to schedule them. You may have the luxury of raising your rates. This is supply and demand: There is limited supply of you, and there’s overwhelming demand.

By raising rates, you will reduce demand—so finding a balance is important. Don’t overdo it! Raise prices slowly, for new clients only. Or raise rates for your most desirable appointment times (Note: If you accept insurance, you will need to provide services at your contracted rate. However, one can reserve premium times for the highest paying insurance companies, or block out some times for cash-only clients.).

2. Get Big

Perhaps, after years of counseling, you decide that spending the majority of your workweek in session with clients isn’t for you. Or, you decide that you want to capitalize on your practice’s extra client leads, without raising prices. A desirable option may be to bring on another counselor.

a. Bring on a counselor.

Bringing on a counselor to work in your practice is a big decision (and responsibility), as it involves much more than funneling surplus client leads. For many, to execute this well, one will need to transition from full-time clinician to full-time manager. Counselors expect a lot in exchange for a split of their session fees. Traditionally, a practice will provide:

• Office Space: Two counselors sharing one office won’t work. Even if one counselor is part-time, there will be scheduling conflicts during the most desirable session hours. 
• Ample Leads: The attrition rate for clients is around 8 sessions. Therefore, a counselor needs 4.5 new clients a week to build and maintain a full caseload.
• Billing / Credentialing: Reliable, timely medical billing is crucial. Also, even if a counselor is previously paneled with insurance companies, additional credentialing is necessary to allow him/her to bill through your practice.
• Reception and Scheduling: Counselors expect a high level of front-end administrative help. Printing forms, ordering supplies, and other office tasks are often the responsibility of the practice.
• Insurance: To recruit great counselors, consider a 50% split on health insurance, and 100% of professional liability insurance.
• Community: Counselors often wish to be part of a community, and even seasoned clinicians expect the practice to offer some clinical supervision.

Changing from a solo-practice to a group practice isn’t a small change; it’s the start of a new business (with more risk, and more reward). Get ready for a new journey, and to again “Do the Franklin!”

A Solo or Group Practice—which is right for you?

I often talk about the benefits of starting a private practice. However, owning your own business isn’t for everyone, and working for a counseling agency is not an inferior alternative. Listed below are 4 reasons to not start a private practice. If any one of the following applies to you, starting a practice may be a bad fit.

1) I need money now!

I have stated that a licensed counselor can start a practice for as little as a few thousand dollars, and that the practice could become cash flow positive within a few months. This is still true. However, one shouldn’t expect to bring in much net profit in year one. Hence, if you are undercapitalized or need a fulltime income right away, starting a practice might not be the best career choice.

2) I want to keep my work separate from my life!

Due to the nature of the job, counselors often struggle with leaving their work at the office—if you own the office, multiply that struggle by 10. For the small business owner, work is intertwined with life. It’s like having a child: the business requires constant attention. You will be home with it on Friday nights. You will be up at 4am comforting and feeding your business.

3) I hate business! / I just want to be a counselor!

Running a private practice has little to do with counseling and a lot to do with operations (billing, staffing, administration, etc.). I have never met a successful private practice owner who dislikes business. If you’re starting your practice longing for the day that you can focus exclusively on client care, you should think about joining an agency.

4) I don’t want to start from scratch!

When starting a practice, often both the business and the clinician are starting from scratch. Get prepared to enter a whole new world of learning. Successful practice owners have read a library’s worth of business books, and have aggressively sought information and mentorship. In addition, building a company is a gauntlet of successes and failures. If you’re not interested in getting an MBA from the School of Hard Knocks, think agency.

Becoming a High Paid Agency Employee

Some counselors think about working for a counseling agency as a “pay me a wage, an I’ll come to work” situation. In contrast, to become a high paid agency employee, it’s better think about agency work as a partnership where both parties bring value to the table. Traditionally, an agency provides office space, clients, clinical supervision, insurance, branding, and a variety of administrative services in exchange for a share of the money a clinician’s services produce. This is the case regardless of whether one is paid hourly, salary, or a percentage of counseling fees.

Hence, to become a high paid agency employee, a clinician needs to bring more to the table. For example, counselors become more valuable to agencies when they:

1)   Get the word out about their services instead of asking the agency to market their services for them.

2)   Speak publically, and mention the agency.

3)   Speak with reporters to get quotations in print, or on the news (especially if they use the agency’s name).

4)   Publish, tweet, and build an online or offline audience.

5)   Build a reputation that brings in more clients. This is especially true if their reputation also brings in clients for other providers at the agency!

6)   Offer specialized services. This is valuable to the extent that their presence allows the practice to accept clients they would otherwise need to refer (e.g., children, foreign language speaking, autism).

7)   Self manage, or request less administrative support from the agency.

8)   Provide supervision or help to other providers at the agency.

9)   Are credentialed with various insurance companies (note: some agencies now require clinicians to be on insurance panels to even apply for a position).

Done right, one might find that working for an agency affords more freedom, and sometimes more money, than private practice. Finally, if you’re bringing serious value to the table, and your agency isn’t recognizing it, it might be time to look for a practice that will!

Today I am sitting at a coffee kiosk at the Reading Terminal Market in Philadelphia, PA. I’m here because this week Thriveworks is opening its third (our second clinical) company-owned location, right here in Philly. As a small company, any endeavor that includes the words “new location” is a serious risk.

I don’t like risk, and the risks of opening a new practice are many. We need the right location, the right staff, the right operations, the right credentialing, and even the right marketing. The failure of any one of these key areas will cripple the project. While risk abounds, I try not to fear it, and over the years I’ve improved (perhaps only slightly) in my ability to access and manage it. In this column, I’ll write what I know about risk as it relates to business in the counseling profession.

1)   Being an Employee is Risky Too

Some claim that being an employee is just as risky as starting a business. I disagree. However, there are risks of employment. An employee can end up on the wrong side of office politics and get passed over for advancement, or lose one’s job entirely. In the health professions, it’s not uncommon for organizations to change directions based on funding. A mental health clinic once catering to college students might transition into treatment for the homeless. In this scenario, one gets to keep his or her job, but the work that was once loved is replaced with an entirely different set of duties and expectations. As one counselor said to me, “I’m still employed, but I’m making less money and spending half my time on case management I never wanted to do.”

Still, employees can’t lose money. Startup costs are zero (to the employee, the employer has costs), and if things don’t work out an employee can simply walk away and find another place to work. If you’re looking to minimize risk, don’t start a practice. Instead, read the previous column, “4 Reasons to NOT Start a Counseling Practice; and 9 Ways to Become a High Paid Agency Employee.”

2)   Failure is Part of Success…but Doesn’t Guarantee It

Thomas Edison, in an over-quoted anecdote, was once asked about his many failed attempts at inventing the light bulb. He replied “I didn’t fail, I found 2000 ways how not to make a light bulb.” He is also credited with saying “Many of life’s failures are people who did not realize how close they were to success when they gave up.”

Is it really darkest before the dawn? Ask Frank Nelson Cole. In 1903, Cole gave a presentation at an American Mathematical Society conference where he proved that a very famous prime number, 2⁶⁷-1, was not actually prime. During Cole’s “lecture,” he approached the chalkboard and (in complete silence) wrote out longhand the number 2⁶⁷-1, which is 147,573,952,589,676,412,927. Cole then moved to the other side of the board and wrote 193,707,721 × 761,838,257,287. He multiplied the numbers by hand, showing that the result equaled 2⁶⁷-1! The attendees erupted with applause. Cole later said that finding the factors of 2⁶⁷-1 had taken him “three years of Sundays.”

While the stories of Edison and Cole show the value of persistence, not all persistence is bears fruit. According to Seth Godin, entrepreneurs need to tell the difference between a “dip” and a “cul-de-sac.” If you’re in a dip, you can push yourself out. If you’re in a cul-de-sac, it doesn’t matter how much you push. Godin states that being told to never quit is ”Bad advice. Winners quit all the time. They just quit the right stuff at the right time.” As you begin (or grow) your practice, some areas of your business might be cul-de-sacs: specific target populations, groups, psycho-educational programs, online services, specific marketing endeavors, specific counseling methods, etc. Learning to differentiate cul-de-sacs from dips will help you to focus on the areas of your business that can grow, and jettison areas that are wasting your time and effort.

3)   Betting the Ranch Versus Taking a Punt

Betting the Ranch: The act of wagering a large portion of your assets. Failure places you into serious financial trouble.

Taking a Punt: The act of wagering a small portion of your assets. Failure doesn’t place you into serious financial trouble.

There is a big difference between betting the ranch, and taking a punt. On one end, if you bet the ranch enough times, you will eventually lose the ranch. On the other end, if you’re so cautious that you never take a punt, you’ll never get anywhere.

Counselors are more often on the cautious end of the spectrum. I’ve known many to be too conservative to take a $400 punt that could build their practice (this could be for a better office, a website, a print ad, a booth at a conference, etc.). While for some clinicians $400 is betting the ranch, for many it’s a manageable risk.

How much can you take a punt with? $40? $400? $4000? The amount of cash you have on hand is not nearly as important as how you interact with the money you have. Ask yourself, “How is my risk tolerance? Am I betting the ranch? Am I afraid to take a punt?”

4)   Risk Versus Reward

Would you buy a car for $10,000, with the potential to resell it for $10,250? No! What if the clutch goes out? Or you overestimated the car’s value? The reward is too small relative to the risk. However, would you buy a car for $250, if it has a blue book value of $10,000? Of course! Even if the car doesn’t run, you can sell it for parts, or scrap. The potential reward heavily outweighs the risk.

So what are the risks and rewards of starting a counseling practice? Service businesses, such as counseling, tend to have low start up costs. There’s no manufacturing, no patents, no inventory. However, counselors today struggle to build caseloads, and they struggle to get paid for services rendered. Therefore, in some aspects starting a counseling practice is low risk, and in others it’s high risk. If you’re considering starting a private practice, invest time before you invest your money. Learn the costs of doing business in your area, and learn the potential rewards (consider reading the previous article “Building a Six Figure Private Practice” which itemizes some of the costs). Finally, while risk abounds, try not to fear it. Take a punt. In time you’ll improve in your ability to access and manage risk.

Are there any publications available to help counselors develop contingency plans for their practices should they become ill or physically impaired?

Thank you for your help.
Janet Black

Greetings Janet,

That’s a really good question. While I don’t know of anything that fully meets the description of what you’re asking, I do have some thoughts and resources.

For the clients: Having a good referral list, as well as an emergency services list, is important. If one was to fall ill, simply having this on hand would help to transfer your clients into good hands (Ideally, the clients’ current therapist would help with the transition process).

For the business: If the owner of a business falls ill, he or she would need to rely on their staff to pick up the ball, while their unavailable. This can be a complicated process. Having enough staff to run the business will be crucial, as well as a well-written operations/procedures manual, that details every single thing that needs to be done to operate with business in the owner’s absence. An excellent resource, that explores this issue is called “The E-Myth Revisited” by Michael Gerber.

Janet, I’m not sure if I fully answered your question, but I hope it’s a start.

If you think it would be helpful to speak with me in person, please feel free to call me anytime at 617-513-5433.

Sincerely,