Navigating Practice Expansion: Financially Healthy Strategies for Group Practice Owners

Are you a practice owner looking to expand your practice?

Embarking on the journey of expanding a therapy practice is exhilarating, but the financial aspect of hiring often goes unnoticed in the excitement. In a recent podcast episode on Scaling Therapy Practice, I explored this critical yet often overlooked aspect of expansion.

Read on for a guide on how to expand your practice, while staying financially healthy!

Clarifying Business Goals

Understanding your business goals is the essential kickoff point when it comes to hiring for practice owners. Taking the time to define these objectives sets the stage for a successful hiring strategy. 

With the year getting started, it's a prime opportunity to dive into your annual budget planning. This process involves mapping out revenue projections for the upcoming year, and breaking them down month-by-month based on your business's seasonal ebbs and flows. 

By linking anticipated revenue with the necessary clinical billable hours per week, you gain a clear insight into the team size and skill sets required to meet these goals. It's like reverse-engineering your success—starting with the big dreams and then crafting the perfect team structure. This method helps pinpoint gaps in your current team and provides a roadmap to determine the exact roles that need to be filled through hiring.

Understanding the Costs of Hiring

Before putting out that job posting, it’s important to consider all the costs associated with hiring, such as salaries, equipment, and tech fees. 

By proactively anticipating these expenses and integrating them into your comprehensive plan, you lay the groundwork for a smoother transition. Delving into the specifics—such as roles, salary expectations, and the array of additional costs associated with each hire, like purchasing equipment or covering monthly tech fees—ensures that there are no unwelcome surprises. This approach offers invaluable clarity on when and how many new team members you can feasibly onboard. 

Also, it's crucial to align your cash flow preparations with the cost of each hire. Creating sufficient runway to accommodate a settling-in period for new hires ensures that they can fully integrate into the practice and start delivering their value within a few months. This foresight prevents sleepless nights brought on by financial strain from over-hiring without the necessary financial runway, steering clear of unexpected cash flow crises that may arise down the line. 

Knowing if it’s the Right Time to Hire

So now, your goals are clear and you understand the costs associated with hiring, but how do you know if it’s really the right time to hire? 

Determining the right time to hire requires a blend of strategic assessment and observation. It's worth considering if your practice has a waitlist, indicating high demand, or if your marketing strategies are successfully attracting ideal clients. 

Also, when your current team is fully utilized, and the demand for services persists, it signals the need to expand. Sometimes, the expansion isn't just about a single hire—it might involve bringing on board multiple people, streamlining the training and onboarding process while bolstering your marketing initiatives to capitalize on the new capacity.

Ultimately, it all circles back to your plan and goals. Hiring should be goal-oriented, integrated into a well-thought-out strategy. Even if your practice isn't explicitly aiming for growth, retention issues or unexpected departures might necessitate hiring to maintain stability. 

In many cases, practices end up hiring a few times a year just to replace lost staff, underscoring the constant preparedness required, regardless of whether the focus is on expansion or maintaining the status quo. Thus, the decision to hire should align with your practice's strategic goals and be anchored in a well-defined plan.

Managing Practice Finances Without Feeling Overwhelmed

Understanding and proactively planning your finances is key to successful hiring and management of your staff. But, if all of this financial talk has got you feeling overwhelmed - I totally get it.

Managing your practice's finances amid the bustle of daily operations can seem like an added layer of complexity. Practice owners, swamped with responsibilities, often find it daunting to juggle these financial aspects alongside their core tasks. However, navigating this realm doesn't have to be overwhelming. 

Start by acquainting yourself with the essential four numbers—revenue, expenses, operating costs, and profit—to lay a solid foundation. If projecting or forecasting seems daunting, contact our team to help you craft a strategic plan. Forward-focused planning empowers you to steer the direction of your practice rather than reacting to circumstances. 

Consider dedicating small but consistent chunks of time—be it an hour per month or quarter—to review your numbers and set objectives. This proactive approach to practice planning, even in incremental steps, helps mitigate chaos and aligns your business goals with tangible financial strategies. Remember, while finance is just one facet of your multifaceted role, investing a little time regularly can yield substantial control and clarity over your practice's trajectory.

As you embark on the journey of practice expansion, remember that clarity in business goals and proactive financial planning are the keys to success. 

By understanding the costs, timing, and strategic alignment of hiring, you pave the way for a thriving practice. If you're eager for further insights into scaling your therapy practice while maintaining financial health, I invite you to listen to the full podcast episode on Scaling Therapy Practice. 

Is it time to get your bookkeeping cleaned up? Learn more about our bookkeeping services here! 

If you want help creating and crafting your financial strategy, set up a consultation with a CFO to review your current financial situation and provide some options on how we can best support you. 

If you’re ready to outsource your finances, learn more about how we can help! Then, set up a consultation with Carla to review your current financial situation and provide some options on how we can best support you.