Shownotes
How much can I earn as a psychologist or therapist in private practice?
Hello and welcome to the Business of Psychology. Today I'm talking about a subject which will probably make you feel uncomfortable. None of us really like talking about money or the fact that we want it or need it. Those things typically give us the ick, and I'm no exception to that, so expect me to sound awkward today. But the fact is that when you are starting out in any business venture, very often there is a financial gap that you need to fill and there should be a financial aspiration, something that you want to aim for, for yourself, for your family, for whatever your reasons are, for wanting a decent income, and it is nothing to be ashamed of. The fact is, earning money in your independent practice does a lot of good both for you and your personal life, but also for the world in general. But many people going into independent practice, or considering growing their practice, will be asking themselves the question, how much should I expect to earn from this business? And today I'm going to talk a bit about how we might start to answer that question.
Full show notes for this episode are available at The Business of Psychology
Episode Links:
Episode 41: How to set your fees in your psychology private practice with “pricing queen” Sally Farrant
Episode 98: The unexpected costs of running a private practice
Episode 19: How Psychologists And Therapists Can Use An Ideal Client Avatar To Co Create And Market Their Services
Episode 158: How to find your ideal clients in 2025: SEO for psychologists and therapists with Chris Morin
Episode 134: Leadership in your Psychology Practice
Episode 61: Turning a practice into a service with Dr Melanie Lee
Episode 152: Thinking differently about your practice: A tool to put the client first
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Evolve and Thrive Mastermind
Are you a psychologist or therapist with a thriving practice, but you're feeling stuck?
Do you dream of more predictable income or more time for your family and maybe the ability to make a wider impact in mental health?
I get it. You are passionate about helping people, but the business side can often feel really overwhelming.
You've probably tried it all; podcasts, books, maybe even some short term coaching.
But maybe you're still struggling with procrastination, indecision, or just not knowing how to create a passive income stream.
If that sounds like you, I've got something really exciting to share with you. I've been developing it for a while and I'm really excited about it.
It's called the Evolve and Thrive Mastermind, and it is designed specifically for psychologists and therapists like you that have a thriving private practice already, but are desperate to bring some passive or semi-passive income into their practice so that they can make more impact in the world and maybe have more flexibility in their life as well.
This program includes mastermind sessions with me and guest speakers, a Clarity and Values day retreat to hone in on your ideal client and the offers that you should be making to them, and the creation of a personalised business and marketing plan. So you will leave the Mastermind with everything that you need to make your plans a reality. You'll get tangible results out of this. So you're going to come away with documents, like your business plan, your marketing plan, and your sales emails, all written. Plus you'll get ongoing support and a community of like-minded professionals to keep you accountable and raise you up when you need it.
So if now is the time to stop feeling held back by uncertainty, and you are ready to really grow your impact and your income with a clear strategic plan, then the Evolve and Thrive Mastermind is the right place for you. So to learn more and take the next step, come over to psychologybusinessschool.com and look for the Evolve and Thrive Mastermind.
This could be your opportunity to transform your practice and give you more flexibility in your life.
Join the Waiting List for Our Growth Courses and Coaching here.
Shownotes
How much can I earn as a psychologist or therapist in private practice?
Hello and welcome to the Business of Psychology. Today I'm talking about a subject which will probably make you feel uncomfortable. None of us really like talking about money or the fact that we want it or need it. Those things typically give us the ick, and I'm no exception to that, so expect me to sound awkward today. But the fact is that when you are starting out in any business venture, very often there is a financial gap that you need to fill and there should be a financial aspiration, something that you want to aim for, for yourself, for your family, for whatever your reasons are, for wanting a decent income, and it is nothing to be ashamed of. The fact is, earning money in your independent practice does a lot of good both for you and your personal life, but also for the world in general.
If you are really struggling with the idea that you need or want to make money in your practice, I'd really encourage you to go back and listen to my interview with Sally Farrant because Sally, as a management accountant, doesn't have any of the same mindset hangups that we typically have around making money, and she really helped me to understand my responsibilities and ambitions as a business owner and to do that without so much shame and discomfort as I did in the beginning. But as you can probably detect, there's still a bit of discomfort there. But the fact is, many people going into independent practice, or considering growing their practice, will be asking themselves the question, how much should I expect to earn from this business? And today I'm going to talk a bit about how we might start to answer that question.
This would be a really great episode to make some notes and do a bit of personal reflection. I'm going to ask a number of questions during this episode, so it might be a good idea to grab whatever note taking method you use and pause this episode to answer some of these questions as we go through for yourself, because it's really important, I think, to be clear on what you need and what you want from your practice financially. There isn't often a lot of space in life to do that, so just give yourself permission to pause this episode in places and think about how this might apply to you. Because whatever stage you're at in your practice, these are questions that it's worth revisiting, so you can check whether you are meeting your financial aims with the business that you're running right now.
How much do you want to earn?
The first question you need to ask yourself is how much do you want to earn? That's not the question you came here to answer, is it? You came here looking for the answer to the question, how much can I earn? But the truth is, the answer to that is whatever you want to, depending on how much you need it, how much you want it, and what you're willing to do to get it. So we're going to start with working that bit out; what do you want and need?
How much do you think you need or want to earn?
If you don't know that number, make some effort to find it out. A lot of people I know who are operating as sole traders, maybe they don't even know how much they typically make and get to keep each month from their practice. It is really important to sit down and look at your household finances and work out; what do I actually want this practice to bring into the household? All things considered, when you've considered tax and pension and all of that, what do I want to be bringing into the household from my practice? Know that number before you even start.
It is interesting to me what might stop us from knowing that number. I think very often, very intelligent people, usually women, but sometimes men too, refuse to find out much about their household finances. Sometimes it's because it brings up anxiety. Maybe there's been experiences in your past that have legitimately left you with trauma around money and looking at spreadsheets and financial data. Maybe it's something to do with imposter syndrome and feeling like you are never gonna be that person that really understands those numbers, and so it's better to not even try. Or maybe it's something to do with the role that you've taken in your household and it feels like it's not your business to encroach on that task. But the truth is, as a business owner, you cannot make empowered and informed decisions unless you are completely comfortable and literate in the numbers in your business. So I'd really encourage anyone who feels that way, to go back to the pricing episode with Sally Farrant and start to get more comfortable with your household finances and with your business finances. Because I promise you, if you are a mental health professional, this will not be hard for you. Not really. It's all about the mindset. It is your mind that is stopping you from engaging in this task. There is nobody out there listening to this podcast who is incapable of understanding their business numbers. I'm not somebody that is gifted with maths, but I've learned how to make spreadsheets do what I want them to do, and I've developed spreadsheets and tools which work for my brain and tell me what I need to know from my numbers. And yes, it's taken me a few years, but I'm so grateful that I went through that process. And I had help, I had help from Sally, who you will hear me talk to on the podcast, and from my tax accountant, Mahmood, from I Hate Numbers, and I just keep asking the difficult questions. If I don't get it, I ask some more questions about it, so don't be afraid to do it, jump on in, you need to understand those numbers.
So the next thing you need to work out is what your expenses in your business are, or what you think they're going to be. And again, if you've got no clue about that, then have a listen to that pricing episode with Sally because that's going to give you a really good idea.
Then when you look at those numbers, you should be able to see quite clearly if you add together the money that you want to make in your practice, plus all the expenses, can you make that amount of money just doing therapy, coaching or supervision within your comfort levels? Can you see enough clients one-to-one to make that amount of money that you want to make in your practice? And look at the number of sessions you would need to offer in order to do that. And then ask yourself, do you want to? Just take a moment to look at those numbers and think either can I do it? And then if you can, do I want to?
So for me, when I run those numbers, in order to make the money that I want to make for my practice, I would need to see about seven clients a day. I do not wish to do that. I know a lot of people do. We've been talking in our professional groups about differences in services, expectations and culturally in different countries, what the expectations are of psychologists and therapists, and I think that's all really important information. But the problem is that number, your comfortable number of people that you can see in a day and feel like you're doing your best work, is entirely personal. And it'll fluctuate depending on what's going on in your life at the moment. And that's why we have to revisit this often because when I was in my late twenties, when I first started my practice, things were relatively stable for me at home, I had kids, but things were smooth sailing, generally, I could see five people in a day and be all right. That is not true at the moment, the way my life is at the moment, I can see three, comfortable is two. Some of you will listen to that and be like, oh my God, that's so low. And other people will listen to it and think, gosh, I don’t know that I can even see anybody at the moment. I have been at every place in the course of my nearly nine years in independent practice. I've been at a place where I could comfortably see lots of people and I've had to take whole years where I've seen nobody for therapy. It is just important to be in tune with the reality for you right now.
So in your reality right now, can you make that money that you want to make by just seeing therapy clients? If you can, then I would recommend really working on your marketing so that you can make that fee that you worked out during Sally's pricing session, if you're in our membership, or by listening to the pricing podcast episode with Sally, so that you are making that from every client. If that is working for you, then that's great. Just invest your time in marketing to make sure that you get that steady stream of clients and you don't have too much of a rollercoaster. And we've got lots of episodes of this podcast on how you can make sure that you're not on too much of a rollercoaster. It's also something that we talk about in my foundational marketing course within the startup bundle. So if that's you, brilliant. Focus on those core marketing strategies, keep that client consistency going, and just enjoy your client work.
What other services you might be able to offer that could bring additional income into your practice?
If you are in a position where you look at that number that you want to make, and you cannot do it by just offering one-to-one sessions, whether that's therapy, coaching, supervision, whatever it is, then we need to go a little bit deeper and start thinking about what other services you might be able to offer that could bring additional income into your practice. That's where we start thinking about what client groups you're currently working with and what client groups you might like to work with if you were going to develop something outside of a one-to-one therapy offering. So we've got episodes of this podcast on working out your ideal client group, and I'd recommend, if you're not quite sure, go back and listen to some of those and fill out some ideal client personas for a group that you are really excited about working with, and crucially, a group that needs something that is not one-to-one therapy. Very often that'll be similar to the group that you see for therapy, but not exactly the same. So it might be that it's the same people, but at a different point in their journey. Or it might be that it's an offer for the people that support or have a relationship with your core client group. So for example, if I’m offering perinatal mental health services directly to people who are struggling after the birth of their child or during pregnancy, then the more than therapy offer that I might consider might be training for workplaces that employ people with perinatal mental health difficulties, or it might be training for other care providers who work in a different capacity with these people, or training for other psychologists and therapists. Or I might decide if I wanna stick with that group to develop something for people that have maybe had some therapy, come through the worst moments, but want some ongoing support. So there are lots of different ways of thinking about it, and I think if you listen to that episode on ideal client group, you probably have loads of ideas for groups that would be well served by something outside of the therapy room.
Growing your practice with associates
The other thing you can consider is growing your practice with associates. So if you have a listen to my episode about client group and you think, gosh, you know, really my passion is about bringing therapy for this client group, then have a look at the resources and podcast episodes we've got about associate practice because it could be that you can create additional income for yourself by bringing other people to work under your brand for you.
Word of caution on that though, if you don't know your financials, as we were talking about earlier in this episode, you're very likely to not bring any additional income into your practice through associates. It's actually easy to make a loss with associates. So if that's the model you decide to go down, then I really encourage you to make sure you've worked out what the costs to you are going to be of taking on associates, and, and what you need to take from your associates to make that profitable so that you are building up that income for yourself, which was the aim of all of this, so make sure that you're doing that first.
The Value Proposition Canvas
Once you know your client group and you've decided whether you are gonna go down the associate practice route or whether you want to develop something kind of outside of the therapy room for them, you can then think of all the different ways that you could bring value to that particular client group, and I'd encourage you to use a tool called the Value Proposition Canvas to help you do that. This a tool which we've talked about on this podcast before, so we've got an episode on it that you can go back and listen to in depth. But it's a tool that encourages you to think of all the problems that your client group is struggling with, the pain that they're suffering with at the moment, and the things that they want to gain from working with someone like you. Once you've mapped all of that out, you can then think about what ways you can alleviate those pains and give them the things that they're hoping to gain. And it really gets you thinking creatively about how you might do that. This is where you might find your kind of head exploding with lots of different ideas for ways you can help the client group directly, partnerships you could form with other organisations in order to help them indirectly. You're probably going to have a lot of ideas here because you're really getting...
