All Things Private Practice Podcast for Therapists

Episode 122: Profit First For Therapists: Making Money Work [featuring Julie Herres]

Show Notes

In this episode, Patrick is joined by special guest Julie Herres, CEO of GreenOak Accounting, specifically designed for therapists and counselors in private practice. They talk about some of the big questions and concerns that private practice owners face with taxes, finances, and ensuring that they see a profit at the end of the year.

You may have been told you don’t become a therapist to make money, but setting up your business to earn it is an important part of sustaining yourself so that you can help others.

Some Key Takeaways:

  1. Financial Insecurity in Private Practice: Many therapists and counselors struggle with feeling guilty about making money in the mental health field, which can lead to undercharging for services and not paying themselves a fair wage. This episode addresses the importance of therapists being able to make a good living and feel comfortable with their finances, offering practical tips and advice on aligning business revenue with personal financial needs.
  2. Lack of Financial Knowledge: Private practice owners may feel overwhelmed by the complexities of managing their finances, including filing taxes and making important financial decisions for their practice. The podcast episode discusses the significance of working with a professional team, such as a tax professional, to prevent costly mistakes and ensure the sustainability of the business.
  3. Pricing and Fee Setting Challenges: Many practice owners may struggle with determining their rates and setting fees for services due to comparing themselves to others or feeling pressured to conform to standard market rates. This episode advocates for setting rates based on individual financial needs and lifestyle goals, emphasizing the importance of staying true to oneself and making business decisions that align with personal goals.

More about Julie:

Julie Herres is the founder and CEO of GreenOak Accounting, a firm that exclusively serves therapists, psychologists, and counselors in private practice across the United States. Over the years, Julie and her team have worked with hundreds of private practice owners and developed serious knowledge about what makes a practice financially successful. GreenOak’s goal is to help practice owners feel comfortable with the financial side of their businesses and have profitable practices. Some of the firm’s biggest success stories were achieved through implementing Profit First.

Julie is an accountant and an enrolled agent (EA). She is also a speaker, author of Profit First for Therapists, and the host of the Therapy for Your Money podcast. 

 


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A Thanks to Our Sponsors: Alma, Therapy Notes, & The Receptionist for iPad!

✨ Alma

I would also like to thank Alma for sponsoring this episode.

Alma makes it easy and financially rewarding to accept insurance. When you join their insurance program, you can get credentialed within 45 days and access enhanced reimbursement rates with major payers. They also handle all of your paperwork from eligibility checks to claim submissions, and they guarantee payment within two weeks of each appointment. You can also attract clients who are the right fit for your practice with a free profile in Alma's searchable directory. Additionally, Alma offers time-saving tools and administrative support, so you can spend less time on paperwork and more time delivering great care to your clients.

Get your first month free with Alma by visiting helloalma.com/ATPP.

✨ Therapy Notes

I would also like to thank Therapy Notes for sponsoring this episode.

TherapyNotes™ is a complete practice management system with everything you need to manage patient records, schedule appointments, meet with patients remotely, create rich documentation, and bill insurance, right at your fingertips. Their streamlined software is accessible wherever and whenever you need it. Go to therapynotes.com and get 2 free months when you use code ATPP.

✨ The Receptionist for iPad:

I would also like to thank The Receptionist for iPad for sponsoring this episode.

As you prepare for the new year as a private practice owner, one area of your business where you might be able to level up your client experience is from the moment that they enter your office and check in with you. For many private practices, the client check-in process can be a bit awkward and confusing.

Clients often enter into an empty waiting room. And chances are you're wrapping up a session with someone else, so there's no way of knowing when they arrive. With a visitor management system like The Receptionist for iPad, you can provide clients with a discreet and secure way to check in for their appointment while instantly being notified of their arrival.

What's more, The Receptionist offers an iPad list check-in option where clients can scan a QR code to check in, which negates the need for you to buy an iPad and stand. Go to thereceptionist.com/privatepractice and sign up for a free 14-day trial. When you do, you'll get your first month free. And don't forget to ask about our iPad list check-in option.


 

Transcript

PATRICK CASALE: Hey, everyone. You're listening to another episode of the All Things Private Practice podcast. I'm your host, Patrick Casale. I'm joined today by Julie Herres, who is the founder and CEO of Greenoak Accounting, a firm that exclusively serves therapists, psychologists, and counselors in private practice. She is also an accountant, an enrolled agent, a speaker, author of Profit First for Therapists, and the host of Therapy for Your Money podcast.

I am really excited to have you on here today and to talk about how to get everything in order, financially, get your financial house in order in 2024, so that we're not scrambling at the end of the year to figure things out.

And I think this is a topic that a lot of therapists are really intimidated by because, you know, as we always talk about, what you don't know, you don't know, we're not business owners, we don't have business training and all the things. So, happy to have you here and happy to have this conversation.

JULIE HERRES: Yeah, good to be here. Money can be a little bit scary, right?

PATRICK CASALE: Money can be a bit scary. I've heard that thought right before we started recording. And you know, you specialize in supporting therapists, why do you think that is for therapists, in general? I know that's a big question, but…

JULIE HERRES: I think it circles back to guilt. What I hear consistently from our clients is, even in grad school they were told, "You shouldn't be in it for the money, you're in it for to help people. You shouldn't expect to make money in mental health."

And I think that's hurtful to the field. And maybe people who would have been great therapists end up not going through with their degree. But there's this ingrained, like, if you're helping people, you shouldn't be making money or you shouldn't be thinking about it.

And I think that's crap. I think it's crazy. You should be able to make a good living doing what you do. A surgeon doesn't feel guilty. I don't feel guilty as an accountant. Like, this is how people live. You should be able to support yourself, your family, doing the thing that is your calling, but also that you went to grad school for. So, I would love to reduce that guilt, somehow, that you should make a good living, and let's go do that.

PATRICK CASALE: I love that. I agree 100%. I think it gets drilled into your head over and over in grad school. Like, I remember, and I think a lot of us listening, probably, heard things that were similar to like, "You don't get into this field to make money." But it was almost like a joke. And it was like this recurring statement that was constantly made and reinforced.

And then if you go into community mental health, where things are, like, grant funded or Medicaid funded, or state-funded, it just gets further reinforced. Like, "Okay, the entirety of the world falls into these buckets or categories. So, if I go out on my own, how can I ever charge a rate that would sustain me and the lifestyle that I want to have?" So, you almost self-sacrifice in a way of like, I'm getting my fulfillment through the work that I do. We know that that does not last long, because the burnout rates are so, so high, because the work is so emotionally taxing.

So, being able to get comfortable with your money is really important. And more so getting comfortable with where your money is going, right? So, like we have to know how to pay taxes, how to get our financial houses in order, because I see so many horror stories. And I'm sure you see significantly more than I do of people who are like, "I haven't put anything aside. I am going into the next year. Like, I haven't paid the IRS at all. Like, I don't even know what to do." And then they're on payment plans for the foreseeable future.

So, can you talk a little bit about some of the big things that you see show up that are really hurtful or damaging to your clients?

JULIE HERRES: Yeah, that self-sacrifice that's ingrained tends to seep into the business owner's mindset as well, right? In the sense of, "Well, I'll pay my clinicians really well, but I can't even pay myself." Really, that's not helpful, that's not sustainable unless you have a trust fund in which case, like, good for you, but right? There's very few fringe situations where that is possible long term. Like, if you're not okay, the business will not be okay, and cannot survive long term, right? So, there's these decisions sometimes that are made without really regard to what's best for the business.

And sometimes you have to say no to things, not because you're a mean boss, but because the thing that you have to protect the most is the business. So, sometimes at the detriment of you having to say like, "No, I cannot give you a raise right now, because the business cannot afford that." And the most important thing is the business to continue to live on, right? If the business continues on, can survive next year, next week, next month, that is in service of everyone around you, your team, your clients, yourself, and that is what does the most good versus like sacrificing for one specific person or for your clinicians at the detriment of then, like, the business is going under. That helps a lot less people than just saying no, even if maybe someone will leave at some point, right? Maybe there's a point where you can't give everyone on your team everything that they want.

And Patrick, I mean, you have a team of 20. Like, sometimes people leave. And that's just the way it is. And it sucks. And I wish it didn't happen. But like, that's just the reality of being a business owner, but you can't make decisions based on the welfare of one person at the detriment of the business or yourself even as a business owner.

PATRICK CASALE: I love that you say that, because that allows you to zoom out a bit instead of focusing so much on like being in the day-to-day, almost in crisis mode to your business, right? Like, we're just in constant fires and responding to the immediacy.

This actually brings up a thought for me. So, I had a team meeting last week, and we were talking about no-show fees and cancellations, which is always a wonderful conversation in the therapy world. And I was just like, "Listen, I ran payroll while our admin was out of town. And I noticed so many no-show fees that we just did not charge or collect for."

We processed that for a while why this is happening. And someone asked like, "Well, is this more about the fact that you want us to get paid or that you want the business to get paid?" And I was like, "Well, both, right? Because I clearly want the clinician to get paid. You don't get paid if we don't bring in money. But the business cannot be sustainable and stay afloat, and we cannot support thousands of people in Western North Carolina if we don't collect our fees, because I can't give you PTO, I can't give you health insurance if we don't collect fees. Like, both of those things have to be true."

So, I think it is about that mindset of the realization we have to treat our businesses like businesses, and for the majority of therapists, that's a very foreign concept. Like, that's not familiar, not comfortable. It makes them feel like, "Oh, that makes me feel like I'm in capitalism." We live in a fucking capitalist society. You have to treat your business like a business.

JULIE HERRES: Like, no one is coming to save you if your business is not making money, right? That's the reality. And 50% of businesses or 48.9% of businesses fail within five years. Like, this is exactly the kind of stuff that will do that.

And in therapy, if someone no-shows, you can't just put that hour back on the shelf and sell it later, right? It is gone. It is gone forever and you have a certain inventory of like, these are the hours that we have available to sell. And if someone disregards that, throws it on the ground, right? Like, you can't sell it again.

So, yeah, those no-show fees are really important. It also helps train your client like you have to show up. This is what you need to do to get better, but also we will charge you, yeah.

PATRICK CASALE: Yeah, and I like so much that just reframe where it was like talking about the fact to your clients, like we only have X amount of slots per week, right? And if you don't show up consistently, that is a time slot that could be better used to help someone who will show up. And I think it's about getting into that mindset, which is applicable throughout. So, that's one thing that I see.

I like that you mentioned a lot of practice owners who are operating in like the red, probably and also the black. You don't see them taking profit. I see so many group practice owners that I coach who are like, "I haven't paid myself in six months." That to me is such a demoralizing feeling, because I know the stress behind the scenes of operating a group practice where I am constantly worried about, "Are my staff happy? Do they have what they need to feel supported? Are they getting paid enough to live their lives, like, more so than just coming to work?" So, there's a lot of stress and overwhelm behind the scenes. And then to hear like, "I can't pay myself?" That's problematic.

JULIE HERRES: Yeah, for many reasons, including, like, you know, what's going on behind the scenes? Are you putting your groceries on credit cards that you've been not paying, right? Like, there is a runway to that we're at a certain point there is no more debt to accrue, right? Maybe that's possible for longer time, because you have a spouse that is bringing income to the household and you're able to live on that in which case you that runway might be longer. But it's also a symptom that something is going on in the business, right? If you're not able to pay yourself and you're doing full-time work in the business, that's a symptom that something is not right.

And so actually looking at what's going on is really, really helpful here. And I know a lot of practice owners have avoidance when it comes to their money like, "Oh, I don't know. I don't want to look. I don't it doesn't feel right." Right? "I don't know where to start, right, it feels overwhelming."

But when you kind of make a habit out of it and say, on Friday mornings, I spend 30 minutes looking at what happened this week, how much money is in all the accounts? What's going on? That is really helpful and it's a good muscle to work as a business owner, but then it becomes kind of this normal thing of, "Oh, I see the ebb and flow of the money in my business. This is how much revenue we brought in this week." Right?

You look at the EHR, look at the bank account, look at your profit and loss, if it's somewhat up to date, right? Well, look at it for last month, just kind of starting to get used to those things so that you're not waiting till the end of the year, doing everything in one fell swoop, and then being surprised by what you see, right? That's not a good thing. If you're surprised in January, like, "Oh, wait, I thought we were doing okay, but we didn't actually make any money." That's not good. That's not a good place to be, yeah.

PATRICK CASALE: It's not a good place to be and it's far too common. So, really trying to have this conversation today help all of you who are listening for the calendar year with some strategies of things that you can immediately start doing and implementing, because I know so many practitioners, whether you're a private practice owner or group practice owner, etc., a contractor at a group practice, who are burying your heads in the sand about your money, especially, when it comes to paying your taxes, especially, when it comes to looking at profit/loss, especially, when it comes to figuring out your monthly budget of where your money is going.

So, Julie, can you give us some tips, some strategies for those who are listening who are like, "Okay, we just made it through the new year. It was overwhelming. I don't want to feel this way again."

JULIE HERRES: Yeah, absolutely. So, first of all, this episode is airing in January, your taxes are not due until April, right? So, today is a great time to start saving money for taxes if you have not started yet. The best time was last year, but that day has passed. We can't go back. So, January is still better than February, March, April, right?

And looking at what's going on is the key, avoiding your taxes for five years just create this big, big monster of a problem in five years. The number just gets that much bigger.

One of the common mistakes, unfortunately, that we do see, especially, new practice owners make in that first year of practice is not saving for taxes. And sometimes that can follow them, that tax burden, it's not going away. It follows them for multiple years to come, right? They'll often go on either a six-month, one-year, or three-year payment plan. Because then you're in that situation where you're paying last year's debt, plus you're trying to get ahead and save for this year's debt.

So, if you're listening, and you're just getting started, like this is a great time to start today and put something aside for taxes on a regular basis.

I'm obviously a fan of the Profit First system. That's why I wrote Profit First for Therapists. That's a nice, easy way to save for taxes, but even if you're not implementing Profit First if you have just a separate bank account, a savings account where you're sliding money over on a regular basis, when you pay yourself, slide some money over, save for taxes. You will be in such a better position than if you're just kind of living on what the business makes and not thinking ahead of taxes are coming whether you want it or not, the IRS is going to get its money. And it's better to file your tax return, set up a plan than for them to just come take it out of your bank account which they can do. There's not a lot of entities that can, you know, help themselves from your bank account, the IRS absolutely can do that. They'll send you a lot of love letters first. But they can come take your money.

PATRICK CASALE: And we're not trying to scare you with this. Like, we just want to prepare you, because-

JULIE HERRES: No.

PATRICK CASALE: …it's important, right? Like, to start facing this stuff now instead of saying, "Okay, it's April and another deadline has passed. And now I have to, like, get prepared for three months from now for my next installment or quarterly tax situation." So, just trying to face this.

And I think if you are like, "Okay, I don't have any money to pay my taxes." Something is better than nothing. Like, putting something instead of just saying like, "We'll deal with it next week or next pay period."

JULIE HERRES: Yes, absolutely. So, saving something and then also paying something with your tax return. Like, both of those things are really, really helpful.

And then if you are getting communication from the IRS, open it and read the letter. I cannot tell you how many times I've been on Zoom with a client over the years where they're like, "Hey, I have this stack of IRS letters that I have not opened."

Like, you guys, you have to open it. You have to open it and tell us what is in those letters so we can do something about it. There are deadlines, right? So, just tackling the thing, just open the letter, look at what's going on.

But Patrick, like this is a no-judgment zone, right? We've worked with clients who are in all different kinds of situations. I've had a client come work with us who had not filed taxes for 10 years, right? Like, that is something that happens as accountants. Like, that is a normal thing. It's not, like, something we see every day, but like it happens. And our job is just to get people on the right track. It's not to judge. We just want you to be on the right track.

So, speaking of that, I guess my next tip would be, I always, always recommend that business owners work with a tax professional to file their taxes. I'm okay with them doing their own bookkeeping for a while, if they have to write from a budgeting standpoint. Like, if you've got to do that on your own, go ahead, do that. But you don't know what you don't know. And so when you're doing your own bookkeeping, and also filing your own taxes, there is literally no one who's looking over your shoulder saying like, "This is wrong, you're not doing this right?"

And business taxes are a lot more complex than just, you know, filing through TurboTax if you're an employee for someone else, right? If you have a W-2, and you're not self-employed, knock yourself out with TurboTax, you've got my blessing. But if you're a business owner, there's just a lot more to it. And I want you to work with someone who can help you see around the corner, because mistakes are just so expensive as well. And usually, a tax preparer will pay for itself in that way. Like, if you're just avoiding a mistake that can easily cost you thousands of dollars in penalties. And so it's really, really helpful for that.

And I say that even though my team and I we don't do tax-only work. So, it's not benefiting me at all. But like I think you should have a tax preparer that's in your corner that's saying like, "Hey, Patrick, here are the things that are coming up this year, here are some new changes." Right? That is just kind of looking out for you as a business owner, I mean, that will pay for itself in no time.

And just like having a lot of other professional vendors on your side, right? I think as you progress past those first couple of months as a business owner, you probably need a business attorney, maybe an HR professional, if you have team members, right? Like, just people who are experts in their specific field that are part of your professional team, and that make you a better business owner too.

PATRICK CASALE: I could not agree more. And I'm so glad you named that, because so often I see in all the Facebook groups, including my own, where it's like, "I'm starting my business, I have these tax questions or these legal questions, but I'm going to try to figure them out myself, or I'm going to ask a Facebook group full of therapists what their opinions are."

And opinions are fine, but they're opinions and they're not trained professionals to answer the questions that a lot of people are asking. So, I think you have to have that almost like boardroom made up of the people who you have in a corner to help you save money, to help you allocate money, to help you secure your future and your retirement, to help you, like you said, not make these common mistakes that we so often can make if we're doing everything on our own. We talked about, like, outsourcing and delegating before we started recording.

But having a trained tax professional feels like a no-brainer to me. And I'm always shocked when people are like, "Yeah, I'm just going to handle it myself or my partner is going to do it." Or like, "I'm going to figure it out as I go."

And it's like, this is a major opportunity for you to really prevent something bad from happening in the future. And this is almost like the start of picking up the shovel to start digging the hole if you are unwilling to kind of go through the motions of finding someone who you can work with. And I think that's a really, really important part of owning a business.

JULIE HERRES: It is and one of my few sell boxes is Facebook groups. I mean, they can be so, so, so helpful. But the number of times I've seen someone post like, "Oh, I have this specific tax question." And people jump in with the very best of intentions, right? Therapists are helpers. Like, they want to help someone out. And I think that's so beautiful. But if your advice is incorrect, you don't have all the facts and circumstances. And I mean, the repercussions of that is huge.

One example that ever popular, "Oh, should I be an escort?" People will jump in and say like, "Oh, yeah, you definitely should." But like, you did not ask what state are you in? There are very, very significant state differences where in some states, it might make all the sense in the world. In other states, you should not do that. But that question isn't even asked, right? So, you're getting advice that may or may not be incorrect. So, you may be saving a couple $100 by not going to someone who actually knows how to answer this question correctly, but you're costing yourself thousands of dollars in taxes that you wouldn't have had to otherwise pay on the back end.

This time of year, we're seeing a lot of benefits questions like should I be on my company health insurance or no? Like, where is it deducted only? And like, that depends on the entity. There's a lot of ifs, ands, or buts here, and an accountants favorite answer is it depends, because it really does typically depend the answer on your specific facts and circumstances for your business, right? So, we would ask a lot of follow-up questions and say like, well, what's the situation in your household? What's going on over here? Blah, blah, blah. Like, there's a lot of different things that go into answering something. And so just be careful listeners about the answers that you get on Facebook.

And if that's where you're starting, because you're then going to your tax preparer, awesome, amazing, great. Like, you've got some contacts, you've got some quick questions to ask, perfect, but that cannot be your only source of information for tax or legal advice, please, please, please.

PATRICK CASALE: I agree, 100%. And, you know, use my Facebook group when you're like, "I don't know how to create my niche, or I need help with my website, or like, I need networking strategies." Great. Don't use a group of 11,000 therapists to answer your tax questions. Like, just like most accountants aren't going to come to a group of therapists and ask them how to file their taxes? So, just really make sure that you're using the appropriate resources that are available to you, because everyone's situation is individually specific. And that's why like so often my answer to so many questions is, it depends. Like, you're asking a question about insurance, you know, policy and procedure in California, it depends. I live in North Carolina. I don't know the answer. So, I think it's important to look at it from that perspective.

Okay, so we're talking about paying your quarterly taxes, hiring a trained tax professional, what else comes to mind that feels like, okay, 2024 needs to be the year where I set myself up for success.

JULIE HERRES: Okay, I would say that comparison is the thief of joy. There is no perfect-sized practice. And again, my team and I, we've seen thousands of practices of every size, right? from startup to multi-million-dollar practice. Every size has its own set of problems, they have their own doubts, they have their own issues. The challenges that you're facing just shift as the business grows. Or maybe a solo practice at the very beginning is struggling with like, how do I get clients in the door, right? And then as you grow towards 10 plus clinicians, maybe you have good strong mechanisms there to attract new clients. But then it's the recruiting machine that's broken, where you're constantly having to recruit, and maybe it's not going well, right? There's other types of challenges or maybe you're struggling with managing the size team that you now have, right? And now you're needing leadership, how do I find that? What do I do?

So, you can make money at literally any stage of practice. And so this time of year, we often will hear things like, "Oh, my goal for 2024 is to get to 500,000, or a million dollars." Or whatever it may be. And those are great goals, but they sometimes can be vanity metrics if we're just looking at that and not like, what is your lifestyle? What are you actually getting to take home? What is left when you're done? Because I'd much rather see a $300,000 practice where the owner is living their best life, they're getting paid well, they're working the hours that they would like to work, they're seeing the number of clients that they'd like to see, than a million-dollar practice that is barely breaking even, barely, barely.

I mean, the cash going out for payroll is so big there, right? Your margin for error is just so razor-thin if you're not making any money, right? 50 grand is going out each time you're on payroll, and there's $1,000 left in the bank. Oh, that stresses me out, right? And I know the business owner is stressed out.

So, I'd like to think about it more of a lifestyle question of like what life do you want to live? How much money do you need to be comfortable? To live your ideal life, right? Like, what are those numbers? So, just even looking at what are these numbers? What does it take for me to live? Because Patrick, a lot of therapists don't know what that number is, right? Like, how much does it cost to run your household? When you ask that question, a lot of people have no idea.

So, I like for practice under-staffed kind of two numbers. One is the basics. Like, you're covering your mortgage, rent, car payment, gas, food on the table, right? Kind of the normal things. And what is the really nice to have, where you're maybe going on a couple of trips per year, or doing weekend away, and a family trip, and you're getting to do maybe hobbies that you really enjoy, right? Like things like that so that you can see what does my practice need to be to support those things, right? When you know your bare bones number, then you also know if you're in trouble, but then you can work your way towards that best life number that you honestly deserve? You just do.

PATRICK CASALE: Yeah, I agree 100%. When I was doing my coaching programs, like, that is where we start. Here's the number that you need to know of like, this is the number I need to make to keep my lights on, to pay my bills, to take care of my basic needs. Here's the number of this is how many weeks of PTO I want to take, this is how many trips I want to take trainings, et cetera. The things you want to do, the reasons you start your business, really understanding the difference that we need to know both numbers. And both are equally as important. And then that gives us that kind of barometer or that like foundation, where it's like, now I know where to go from here.

And that is so important, like when we're talking about it from this perspective about, like, rate setting, because, for example, for most therapists are like, "What does everyone charge in my area? That's what I'm going to charge." And I was like, "Oh, no, again? This is individually dependent. Your rates and your fees, sure, we should take a look and do some market research. But we should really be basing our rates on what do I need to make to sustain the lifestyle that I want to have or I need to have. And then you start to do the math, opposed to like, "I went on Psych Today and I looked at everyone's pages. So, this is where I fall in."

And it's like well, but you don't know any of those situations. And most of those people are probably just duplicating that process that you are doing now, so there's no way to actually determine how much we should set up our fees for.

So, again, this just goes back to the most therapists have zero business training and understanding. So, I think it's just important to make it as simple as possible. And comparison is the thief of joy. You don't know what's going on behind the scenes for that million-dollar practice. You don't know what's going on behind the scenes for that $100,000 practice. So, like, I think it's just important to stay the course, focus on yourself, focus on your needs. What do you want out of this career?

Opposed to thinking like, what am I supposed to be doing? Because when we get into that, like, what am I supposed to be doing mentality, when I started my group practice, we're going up on three years now, I never expected like I'd have 20 full-time employees, two office managers, whatever. And now when I'm thinking about them I'm like, what's next year going to look like? Are we going to hit 40, are we going to hit 50? I really don't know. But I don't ever feel like I'm in this mentality of I'm supposed to do it this way.

I want to make sure our culture is cohesive, I want to make sure people are taking care of, that we have enough clients coming in to go around. And that's really it. And then you can start building off of that, opposed to saying, "Well, other group practice owners in the area have 30 employees. I think I'm supposed to do that." That's where you-

JULIE HERRES: Yeah, I should.

PATRICK CASALE: …start to stumble, yeah.

JULIE HERRES: Mm-hmm (affirmative.) Yeah, the shoulds are really what can tend to get you in trouble or right of like, oh, I should do this, or like others are doing that so I should do it, too.

And the Facebook groups can be a little bit to blame here where like, you see, "Oh, these people are doing really well." Right? "Or look like they're doing really well." As an accountant I've seen under the hood of thousands of practices, things are not always what they seem, is the only thing I will say there, right? Like, just because it looks great doesn't always mean that it is. But that's also not like what is actually true to you?

It seems like buying a building is one of those shoulds that kind of comes and it comes in waves where we'll have all of a sudden, like five clients say, "Oh, so and so bought a building, so I feel like I should buy a building?" Where like, is that actually in line with your goals? Like, do you want that? Like, tell me more? What is the actual reasoning behind this?

And sometimes it makes sense. And a lot of times, it doesn't, right? If that will spend your very last dollar, and that means you have absolutely no cushion, that is a bad idea. You are better off paying rent, where you have a lot of flexibility too, right? Where if this space no longer fits your needs, you can move somewhere else. Once you buy a building, you're kind of locked in. Like, what if your business outgrows that building? Like, good luck, right? Commercial real estate does not move the same way that residential real estate moves.

Like, that's just one of many, many examples. But it's a funny one, because it often feels like a should, right? Like, "Well other successful business owners are doing it, so it feels like I should also." But like, do you? You do not. You do not have to. You can do whatever feels true to you.

And speaking of like living your best life and looking at the numbers, I have a whole chapter in my book Profit First for Therapists on reverse engineering your business to meet your life. So, looking at what do you need to live and then reverse engineering your business to sustain that. Sometimes we what we find is the business owner's frustrated, they're feeling like, "Oh, I'm working so hard, why is this not working? Sometimes, because you're trying to jam a square peg into a round hole where you're trying to get something out of your business that it literally cannot provide you, right?

For example, you're seeing 10 clients a week at $125 per client, per session, and you're expecting to make 200,000 in that year. Like, the math does not add up. Your business cannot give that to you. But this is what it can give to you or these are the things that you can do if the 200,000 is the important thing, here are the things that you can do to get to that point. Are you willing to do those? Right?

So, it's all a whole lot of decisions, but the math has to make sense, right? And so just looking at like, does this math add up? Yes or no? There's a lot of peace in knowing that, right? Of like, okay, this is not doable. What is doable? Am I okay with that? Or do I want to change something?

PATRICK CASALE: Absolutely. I agree, 100%. Sometimes the math ain't mathing. And that's true. And I think we have to just get more comfortable talking about the math and looking at the numbers. The numbers don't lie.

JULIE HERRES: Yeah.

PATRICK CASALE: I mean, we cannot fake them. It's [CROSSTALK 00:33:49]-

JULIE HERRES: They don't have an agenda. They are what they are, yeah. And like this is like second-grade math, right? So, if we're just taking pen to paper and looking at what's my average fee per session, you don't want to get lost in the minutia, right? Of like, oh, well, this panel gives me, this… Just what's the average fee per session? What's the number of sessions on average per week in the business? Right? Not, "Oh, this week is lower than that week. Oh, it was Thanksgiving." No, what's the average? Right? That gives you some really solid numbers.

A forecast is always going to be wrong, because it's a forecast. We don't have an actual crystal ball but like it gives you a good idea of what things need to be true for something to be possible. If that specific week you have 10 no-shows, well, then obviously that's not going to be possible that week, but like we can get as close as we can, yeah.

PATRICK CASALE: Absolutely. I agree, 100% I hope this episode was helpful for all of you. And I know that there's a lot more to it as you go on. But the main takeaways, I really hope you can incorporate if you haven't already, if you're sitting here thinking like, "Fuck, I haven't done any of this, and I feel ashamed about it." There's no shame here like Julie said.

JULIE HERRES: Literally, no shame. No shame at all.

PATRICK CASALE: Yeah, an accountant is here to help you. You know, a professional tax person is here to help you. They're not here to shame you. They're not here to make you feel judged. The same way we don't do that with our clients. So, you're not alone. And that's why we're talking about this is the fact that we just see it far too often. And I think it's really important to just take control this year, starting now, with your situation. Do not wait until December 31st, 2024. Really start thinking about what changes can I make? How can I make my plan? How can I make my roadmap? Who are the people I can hire to help me so that this does not have to be as stressful as it's been in the past?

And if you're doing all these things, then kudos to you. And you're ahead of the game. And I think that's important to acknowledge, too.

JULIE HERRES: And, Patrick, I also want to mention, you don't need to fix anything before working with a tax preparer. Just like when a client comes to you, you don't expect them to have read all the self-help books, and have done a bajillion hours of research online. Like, you want them to just show up as they are, because you're going to take them wherever they are. So, the same applies for accounting, you don't need to try to fix it or try to get it right. Like, we can do that for you. They don't, you know, wade through the muck if you don't want to. They are professionals that can do all of that for you. And you don't have to change anything, just come as you are with what you have. And we can meet you right there.

PATRICK CASALE: I love that. I really, really love that that's a great sentiment to end on and a really good conversation with good information. So, I hope this was helpful for everyone.

Julie, thanks so much for coming on and making the time. And please share with the audience where they can find more of you.

JULIE HERRES: I would love to. You can find my team and I at greenoakaccounting.com. You can find there our courses. We have a couple of new courses that are self-paced, so you can do them on your own time. We have monthly ongoing accounting services as well so you can find out more about scheduling a consultation with us there. And then you can also find my book Profit First for Therapists on Amazon or any of the popular booksellers.

PATRICK CASALE: Awesome. And you have a podcast as well, correct?

JULIE HERRES: I do. My podcast is Therapy for Your Money. We talk about all things money specifically, for private practice. Thanks for reminding me of that.

JULIE HERRES: I want everyone to get all of this information. All of that information will also be in the show notes so that you have easy access to everything that Julie just listed. Julie, thanks so much for coming on and making the time. This was great.

JULIE HERRES: Thanks for having me.

PATRICK CASALE: And to everyone listening to the All Things Private Practice podcast, new episodes are out every single Saturday on all major platforms and YouTube. Like, download, subscribe, and share. Doubt yourself, do it anyway. We'll see you next week.

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