Are You in La-La Land About Your Private Practice Income?

I want to share with you two responses I sometimes get from therapists and healers when I pose the question, “How much money do you want to earn in your practice?”

The first is the “I Don’t Know” response. It sometimes goes like this:

“I never thought about that before.”

“I want to make a good  income.”

“Enough to take a vacation every year.”

As you can see, the problem with these statements is that they don’t say anything about how much income these professionals want to generate. It’s difficult to achieve a goal when you don’t know what it is.

To the other extreme is the “Pie in the Sky Response,” which sounds  like this:

“I heard that people can make a lot of money on the Internet. I want that too.”

“I want to make a million dollars in 6 months.”

Ok. I’m exaggerating on that last one. 🙂 No one has really told me that they wanted to earn a million dollars in 6 months.  But, you get the idea.

Often these folks don’t have business skills or experience, lack necessary resources to build a business, and don’t have a plan. Obviously this is a problem as one needs to be grounded in the reality of what it takes to earn the amount one says they want.

If you recognize yourself in one of these two scenarios– even if it’s just a little bit– I don’t want you to feel badly.  I want you to do something about it.

To get started, here are 3 things you can do right now:

1. Be clear on what kind of lifestyle you want to live and write it down.

There is no point in coming up with an arbitrary amount of money you want to earn when you don’t even know what you want it for.

Be very specific (e.g.” I want to take a 1 month vacation each year” or “I want to buy a larger home”). Don’t be afraid to dream and thing big. On the other hand, try to be realistic about who you are, your values and what really makes you happy.

2. Calculate how much you will need annually to fulfill your lifestyle and write it down.

Include the amount you need to live on, the cost of any extras you want in your life, and the amount you want to save or invest each month.

Yes, you need to actually do the math.

I know you might not like working with numbers, so if you need help from someone, make sure you get it.

3.  Calculate how many client hours you need per week in order to meet your yearly goal.

Remember that to run a successful business you have to allot time for working ON your business, which includes things like administrative tasks, bookkeeping (if you don’t hire a bookkeeper), marketing, training, professional development, etc. This means if you only want to work Monday-Friday from 9-5, you won’t be able to see clients for the entire day because you will need to allow time for these activities.

Finally, don’t forget to factor in business expenses. A private practice is a business after all, and businesses cost money to run–and even more money if you want them to run well and to grow.

I hope those of you who need to will take action by completing the above 3 steps…and soon. It is so easy to procrastinate dealing with one’s finances. But the sooner you deal with them, the sooner you will start taking your business more seriously and allow space for greater success.

Before I close, I want to say that many years ago, I had to take a hard  look at how I was managing my own finances. Thanks to Karin Mizgala, my financial planner colleague, and her amazing knowledge, skills and patience with those of us who don’t like dealing with the issue of money and finances, those days are long behind me.

Please share your experiences and thoughts on this topic below, by clicking on the “Comment” button below.