Private Practice Startup Podcast – Episode 169
"What to Track to Have a Successful Business"
Hosts: Dr. Kate Campbell & Katie Lemieux
Guest: Julie Harris, Accountant and Owner of Green Oak Accounting
Release Date: January 18, 2020
Episode Overview
In this episode, Kate and Katie sit down with Julie Harris of Green Oak Accounting to tackle one of the most crucial—and often intimidating—aspects of running a private practice: what to track to ensure business success. They dive into the world of KPIs (Key Performance Indicators), financial clarity, and practical metrics every private practice owner should know, whether you're solo or running a group practice. Julie draws from her experience working with hundreds of therapists across the U.S. and provides concrete, actionable advice delivered in a warm, approachable manner.
Key Discussion Points & Insights
1. Julie’s Journey and Why KPIs Matter (03:08–04:38)
- Julie’s accounting firm started accidentally with a single private practice client; word of mouth grew her niche.
- She observed common patterns among successful and struggling practices, leading her to pinpoint key metrics for growth.
- KPIs Defined: Julie breaks down that KPIs (Key Performance Indicators) measure essential business activities.
- “If you’re not documenting and tracking your progress... it’s really hard to change it.” – Host, 02:55
2. Starting with the Basics: Average Fee & Overhead Per Session (04:39–08:20)
- Average Fee Per Session: Essential to understand your real earning per hour/client.
- Formula: Income for the month ÷ Number of sessions that month.
- Most practice owners overestimate this figure.
- Ex: If you earn $8,500 from 100 sessions, your average is $85/session—not your top fee.
- “Almost always, practice owners think this is higher than it actually is.” – Julie Harris, 05:36
- Average Overhead Per Session: How much each session costs you in expenses.
- Formula: Total overhead in a given month ÷ Total sessions that month.
- Julie recommends for solo practices: overhead should stay between 25–50% of income (not more than 50% for most).
- Using This Data: Helps you determine pay, incentives to outsource, and future hiring or expansion decisions.
3. Overcoming Money Anxiety & Fear of Numbers (08:20–10:28)
- Therapists often avoid finances out of fear or discomfort (“ostrich syndrome”).
- "There's this fear of the numbers. And the numbers are your friend. They're trying to tell you a story.” – Julie Harris, 09:54
- Directly reviewing numbers removes anxiety and gives power to plan, rather than react emotionally.
4. Burn Rate—Knowing Your Financial Runway (13:38–15:44)
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Burn Rate: Measures how quickly you’re spending available cash.
- Formula: Last day bank balance – First day bank balance in a month. Is it trending up (good) or down (warning sign)?
- Especially vital for startups to see how long current reserves will last.
"If that number is negative, then you're burning through money, right? ...Negative burn rate is not a good thing." – Julie Harris, 13:40
5. Cost of Client Acquisition for Private Pay Practices (15:46–18:02)
- Track total marketing spend ÷ new intakes per month.
- Not about hitting a specific target, but establishing a trend for your practice.
- Knowing your acquisition cost helps judge ROI of marketing channels and adjust spending intelligently.
- Feelings vs. Facts: Numbers tell the story and guide decisions, not fleeting impressions.
“Feelings aren’t facts, folks.” – Katie Lemieux, 17:58
6. Space Usage Efficiency (18:43–21:36)
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Calculate how efficiently your office space is used: Patient hours ÷ Total available hours.
- Reveals if you need more space or just smarter scheduling.
- Example: A therapist seeing 25 clients with office space available for 91 slots a week means more than 60% of time goes unused.
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Use this metric before considering expansion—may reveal opportunity to sublet or use existing space better.
“This is a case where you think you have a space problem, but you actually just have a scheduling problem.” – Julie Harris, 19:22
7. Labor Usage & Scope Creep (22:17–24:03)
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Essential if you have employees or shared duties.
- Formula: Billable hours ÷ Total hours worked (incl. admin tasks, meetings, etc.)
- For most, 4–5 admin hours per 20 clinical hours is average; if billable ratio falls below 80%, evaluate efficiency and/or role clarity.
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Prevents overpayment for non-revenue-generating work and highlights where roles may be drifting (“scope creep”).
“That’s where the scope creep can happen, where all of a sudden you look up and people aren’t seeing nearly as many clients as they used to, but they’re doing more of this stuff that actually costs you money.” – Julie Harris, 23:08
8. Conversion Rate—Tracking Calls to Intakes (26:09–27:38)
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Useful when considering hiring administrative help.
- Count how many calls/inquiries come in versus how many convert to intakes.
- Track common objections/questions to prep scripts and optimize conversion.
- When you compare your rate to that of hired staff, you can train and benchmark more effectively.
“Conversion rate...not financial, but gives you a baseline. An admin may never be as good as you, but at least you have something to compare to.” – Julie Harris, 26:11
Notable Quotes & Memorable Moments
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On Getting Over Financial Avoidance:
“There's often this ostrich syndrome where you're just putting your head in the sand. I'm like, okay, if I don't look, it's not a problem. Nothing is happening. So don't be afraid. There's no need to be afraid of the numbers. They're there to help you.”
(Julie Harris, 09:54) -
On Making Objective Business Decisions:
“I always love when, you know, conversations are more about the numbers. It really takes all the feeling stuff out of it.”
(Katie Lemieux, 25:22) -
On Space Utilization:
“You think you have a space problem, but you actually just have a scheduling problem.”
(Julie Harris, 19:22)
Actionable Takeaways
- Start tracking at least one or two KPIs instead of trying to monitor everything at once—avoid KPI fatigue.
- Know your average session fee and overhead; use these to make critical business choices about pay, outsourcing, and hiring.
- Don’t let discomfort with numbers prevent you from seeing and solving business problems; your numbers always tell a story.
- Review burn rate regularly if you’re just starting out, or if cash flow is a concern.
- Evaluate your marketing spend strictly by acquisition cost, not gut feeling.
- Analyze office usage before expanding; there may be more room (and income!) in your existing setup than you realize.
- Track labor usage and keep an eye out for “scope creep” in staff duties.
- Measure and optimize conversion rates; use findings to train admin staff and improve intake processes.
- If numbers aren’t your strength, seek support—an accountant like Julie can turn confusion into clarity.
Julie’s Free Resource
- Five Days of Profit Boosting Private Practice Tips:
Includes business budget workbook, success ratio calculator, and a checklist of essential financial tasks.
greenoakaccounting.com (28:25)
Final Thoughts
If the numbers and KPIs discussed make your head spin, you’re not alone—but they’re essential for lasting success. Julie stresses that tracking and understanding even one or two of these key metrics can dramatically inform better choices, clarify your path, and ease business stress. For those looking for extra support, Julie’s resources and personalized approach could be a game changer.
Important Timestamps
| Timestamp | Segment / Topic | |:----------:|:------------------------------| | 03:08 | Julie’s background and intro to KPIs | | 04:39 | Average fee per session discussed | | 05:36 | Practice owners’ frequent misperception of their “average fee” | | 08:20 | Emotional resistance to tracking numbers | | 09:54 | “Ostrich syndrome” and embracing the numbers | | 13:38 | Introduction of “burn rate” and why it matters | | 15:46 | Calculating cost of client acquisition (marketing ROI) | | 18:43 | Measuring and optimizing office space usage | | 22:17 | Labor usage and managing scope creep in staff roles | | 26:09 | Conversion tracking for administrative calls to intakes | | 28:25 | Julie’s free resource and encouragement to connect |
For therapists seeking practice mastery, understanding and tracking your business’s key metrics is not optional—it’s vital. This episode serves as both a primer and a pep talk to make numbers work for you, not against you.