Recession-Proofing Mantras

How to Stay Calm When Your Practice Seems to Be Under Siege

Magazine Issue
March/April 2010
Recession-Proofing Mantras

For therapists trying to keep their heads above water, struggling to fill their schedules with clients and show a profit every month, it’s hard to see the current economic crisis as being positive in any way. But crises, by their very nature, whether personal or global, challenge us to fit old practices to new realities. As noted economist Paul Romer says, a crisis is a terrible thing to waste.

Coping with this recession means contemplating changes in how we do business. In fact, many small businesses improve only during bad times, when it’s no longer possible to put off making necessary changes. This recession offers therapists the opportunity to reassess their position in today’s mental health marketplace.

Since changing old ways of working is never easy, I encourage the therapists whom I coach to use “business mantras” to free them to think “outside the box” and develop new business strategies. Here are three such mantras that therapists who consult with me say are especially helpful for challenging tired assumptions about their practices.

“Focus on Profit, not Growth.”

Bernie, a licensed counselor in central Florida, phoned me from a small beach town that he termed the recession’s “ground zero.” “We’ve had massive losses in population and jobs; it looks like a ghost town around here,” he said. Desperate to boost his practice, he said, “I have a million ideas, and don’t know what to do first. I’m thinking about new workshops, networking more with referral sources, redoing my brochure, producing some training videos, or writing a book. Sometimes, I think I’ll bag it all and look for a part-time job. I just don’t know where to start.”

I understood the fear in Bernie’s voice and the impulses that alternated between trying everything at once and giving up. The first thing I did was ask him to focus on his immediate situation; I wanted him to get grounded in the here and now. During a business crisis, it’s important to keep your eye on short-term profit (your income minus your expenses) and put aside any ideas of expansion, which inevitably require time, money, or other resources and may be slow to show results. I told Bernie, “I want you to put all thoughts of new services aside for now. Conserve your energy and finances. Let’s start by looking at what’s going well in your practice—anything at all—and let’s build on that.”

When he started thinking this way, he found that he had a lot that was going well: solid referral sources, loyal and appreciative clients, and a reputation as the “go-to therapist” for acting-out teenagers. I suggested a slow-growth, three-tiered strategy. First, lower your input costs. He did this in a month by negotiating a 20-percent reduction in his office rent. Next, become more productive. He identified unbilled services that he routinely offered, primarily hours of calls each month with the teachers of his adolescent clients to check on progress; he decided to bill for these calls. Finally, become more efficient. With his open hours, he made inroads into clutter and filing.

Only then, with a cushion of reduced expenses, additional income, and reduced administration time, did we begin to talk about expansion, which in his case meant developing a methodical marketing plan for filling his empty client hours.

“Don’t Resist, Assist.”

In today’s recession, many therapists are finding that they’re emotionally or intellectually unprepared to make changes at the pace that their practices require. Sylvia, a senior therapist with excellent clinical skills, told me she was “in the dark ages” when it came to marketing her practice. Referrals had dried up. She wanted a website to attract clients, but she was computer illiterate. She felt she had to master the technical software before she moved forward.

“I know this is ridiculous, but I’ve been struggling to write and produce a simple website for more than two years,” she explained. “I’ve purchased a website name and a template, but I’m totally blocked. And before you say anything, Lynn, you should know that I have issues about hiring anyone to help me. It feels like I should be able to do this myself. Other therapists I talk to have websites they’ve created. I feel stupid that I can’t produce this website on my own.”

In a recession, timeliness—the ability to move forward quickly with a business plan—is crucial. I told Sylvia that her impulses were good: she did need a website, but it was time to assist the forces of change instead of resisting them. I reminded her that it’s not, as some say, “the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.”

Laughing at this, she said, “Well, I always prided myself on being open to change, but you’re right! I’ve shut down. Help me open up!” To do that, I asked her to research things she could do to develop her practice by simply getting curious about what other therapists were up to and what was working for them. At our next coaching call, she’d made a list of ­suggestions about billing practices, office equipment, social marketing approaches via the Internet, and a host of resources and possible help to hire—all from talking to her friends and colleagues. She now felt okay about hiring consultants to help her write copy for the website, start a new filing system, and automate her billing. Step by step, she started updating the business model for her practice.

“The Most Flexible Practice Wins.”

Years ago, a presenter at a workshop I attended observed that the most flexible person in a system has the most influence or the widest range of choices. During a negotiation, the person who sees more sides to the argument and adopts multiple strategies can get others to a win-win agreement faster than a person who sees only one point of view. An advantage of having a small business is the flexibility it offers that larger enterprises can’t match, with the corresponding ability to adapt to new markets and end an unprofitable program without delay. That means that achieving flexibility in business is similar to mastering ballroom dancing. The key is recognizing that, when your partner is the economy, you have to allow it to lead: don’t waltz when it wants to tango! The crucial thing is to learn how to follow and stay light on your feet.

Janice, a social worker specializing in marriage counseling, is one of the few therapists in her city who doesn’t rely on managed care. Instead, she operates a fee-for-service practice, but these days, her income is way down: clients who once saw her each week now come once a month.

Our consultation began by assessing Janice’s flexibility within three areas of practice: pricing, accessibility, and services. When I asked, “Can you lower your price point in ways that would still protect your profitability?” Janice wasn’t sure. We brainstormed together. How about adding low-cost, very small groups to fill in empty hours? What about discounting the times of day that don’t fill easily? Would she be willing to offer a discount for prepaying? How about a discount for accepting credit cards? She thought about these options, weighing the pros and cons, and got excited about one: opening a merchant account to accept credit cards, which would give her clients an additional way to pay for sessions.

Then we explored flexibility regarding her accessibility. Janice had a central location for her office in the city and worked a four-day week, Monday through Thursday. Again we brainstormed. Could she add Friday-evening hours, or weekend times? She decided not to shift her hours, because a shorter week was important to her quality of life, but she found an aspect of accessibility that she could offer: she’d return all calls within 24 hours and see new clients within a few days of their initial call. I asked her to note this on her voicemail and her website, so clients would immediately recognize ease of contact as a distinctive feature of her practice.

Then we looked at a third area of flexibility: she could offer a “menu of services” to give her clients a greater sense of choice. Sometimes the reason clients hesitate to sign up for needed services isn’t an issue of the price: it’s reluctance about how the services are presented. Most of us value having some choice over how we purchase services. In a medical model, a doctor typically tells you what you must have: take it or leave it! In a consumer model, a therapist can offer you a menu and make informed recommendations.

One consumer-driven strategy is to mix and match services and their price points into parcels to give clients a stronger sense of choice. I showed Janice how to identify her existing services, create packages, name and price them, and then list them in her brochure and on her website. Even though she had a limited service (marital counseling), she identified two ways of packaging it:

– Couples-counseling session: one hour for $120.

– Follow-up sessions by phone: thirty minutes for $30.

Using these menu items, she came up with three packages from which a client could choose:

– Package #1, Crisis Intervention. Best for a couple in trouble who needs intensive marital therapy. Weekly in-office sessions, plus two additional check-in phone calls as needed. Price: $600 per month.

– Package #2, Working Through. Recommended for those who need ongoing therapy, at a slower rate. One hourly session every other week, plus one phone call each month as needed. Price $300 per month.

– Package #3, Maintenance. Supportive therapy, best for those in stable relationships and situations, good for staying on a steady track. One hour a month, no additional phone calls. Price: $120 per month.

With this menu pricing, Janice found that when potential clients called and questioned her fee, or the fact that she didn’t accept managed-care payments, she had a way to offer them a chance to select—with her recommendations—what might work best.

In my own private practice, I rely on these mantras and a host of others to help me stay calm during the push and pull of a difficult economy. I, too, need to focus on finances and be willing to change my behavior and sway with the market. I heard another helpful mantra this week when I braved the cold weather to attend a salsa class for beginning dancers. The teacher told the class: “Those who can’t dance say the music is no good.” He added with a smile: “Just for you to know, our music is fine here tonight.”

Most therapists are untrained in business operations; we can use the excuse of the recession for our own business inadequacies. But if we’re honest, we might look further, to see that the recession offers us an opportunity to see our practices and ourselves with new eyes. With the proper framework, we can use this challenge as a jumping-off point to shift direction and make the business of therapy more purposeful and more profitable.

Adapted from Crisis-Proof Your Practice: How to Survive and Thrive in an Uncertain Economy, by Lynn Grodzki (W. W. Norton, 2009).

Lynn Grodzki

Lynn Grodzki, LCSW, MCC, is a psychotherapist in private practice, a master certified coach, and the author of Therapy with a Coaching Edge: Partnership, Action and Possibility in Every Session and Building Your Ideal Private Practice.