Although many people would love to venture into the world of private practice business, it is not an easy world. According to studies conducted by the United States Small Business Administration, the survival rate of business enterprises is not very favorable. Only about two-thirds of businesses survive for two years or more. Not only that, but the number keeps on dwindling further down as more years pass by.
Less than half of the businesses established survive for six years or more.
With these statistics in mind, it only shows how difficult running a business can be! But how difficult is it to maintain a business? What are the top five reasons why private practices tend to fall short in their lifespan?
1. Resource Requirements are Underestimated
Opening up a private practice requires more than financial resource and guts. It entails a more detailed process and planning than one might think. Aside from being able to have the needed capital, one must have a clear and concise plan on how to start the business.
It isn’t just a simple checklist that you can complete overnight. You should know some basics:
- Where to locate your practice?
- Who will be your ideal clients?
- Will you take insurance?
- How many clinicians will you employ?
- How much is your workers’ salary or percentage?
- How can you pay for the business’ bills and taxes?
Many private practices fail because owners don’t start with basic business principles. Being a great clinician does not equal having a great business. If you are not ready and prepared, you will be easily swept away by the turbulence of challenge.
2. Low Client Satisfaction
Revenues, product quality and cost-effectiveness are very important in business, but are you offering good service? Common ways that people let down their clients are:
- Not returning phone calls or emails quickly
- Having a hard to navigate website
- Having an unclean office
- Not having additional amenities like water or coffee
- Not having a scheduling system
- Sloppy confidentiality
Counseling quality and cost-effectiveness can attract a lot of consumers, as quality and cost are two of the most important things that consumers look for in products or services. However, as you improve your quality, you can improve your rates. Having great revenues ensures that the business can keep on running.
Client satisfaction makes the private practice continue to exist. Not knowing how to really communicate to the clients on their preference and suggestions can close your doors.
3. Too Common: No Uniqueness
When I first launched the Practice of the Practice Podcast, I did a lot of research. The only other private practice podcast at the time was the American Counseling Association. They had not posted in more than four months. Thus, when I launched, right away iTunes ranked me #1 and I could say I was the #1 podcast for counselors in private practice. There was no competition!
In the business world, there is much competition awaiting everyone. The more common your business is, the lesser is your chance in winning. If there are a lot of counselors in your area, you have to set yourself apart!
So how do you tell your story as a private practice? How do you market those skills and niches?
One of the reasons that businesses fail is because the team lacks the marketing skills.
Clinicians have to clearly state the advantages of the counseling. Sometimes customers won’t know how great your practice is unless you present it through your website, social media and traditional local media.
4. Lack of Planning Goals
Many people who venture out into private practice don’t properly plan their outcomes. In my private practice consulting, I teach my clients about having one or two KPIs. A KPI is a “key performance indicator.”
A KPI is the bottom-line result of what you do well. For example, a KPI could be:
- Total sessions in a month
- Total gross income in a month
- Satisfaction on a survey
So if you’re doing marketing well, your KPI will change. If your social media is doing what you want, your KPI will improve.
KPIs can easily get lost in the battle. It is not only in business but also in almost anything one should do.
5. Too Rigid: Not Being Flexible Enough
Some private practice fail to adapt quickly to changes in the market, like customer needs and competition. Private practices that thrive will move quickly. They will write blog posts about current topics and trendjack what is being discussed in the media.
They’ll actively engage on social media and find new ways to enhance their website. Being sluggish in adapting changes can cause private practices to be left with few clients.
Avoid these pitfalls and you’ll grow a healthy, thriving private practice that will increase your influence and your income!
Declining graph photo available from Shutterstock