Summer School Lesson 3: Your business model

Hello and welcome to the Business of Psychology Summer School edition.

Over the six weeks of the English school holidays, we are doing things a little bit differently around here. If you're looking to start up an independent practice in September, then this is the place to be as each week I'm dropping in with a quick lesson and tasks that can be completed in 30 minutes or less from your sun lounger.

By the end of the six weeks, you will feel ready to step into your practice in September, confident that you can find clients and have a safe and viable business foundation.

Each week, the lessons will go out on this podcast feed, but if you want the weekly tasks, workbooks, private community, and a live session with me at the end of the summer to hold you accountable and make sure nothing stands in your way, you will need to sign up here: PBS Summer School

I would love to see you in the community.

Full show notes of this episode are available at The Business of Psychology

Links & References:

PBS Summer School Sign Up

PBS Start and Grow

Episode 41: How to set your fees in your psychology private practice with “pricing queen” Sally Farrant

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@rosiegilderthorp

@thepregnancypsychologist

Week 3: Your business model

In this lesson, we focus on making some key decisions that you need to feel comfortable with in order to start seeing clients. And these questions are basically about how you want to work and what boundaries you want to create around your practice. So, a great thing to be thinking about while you're on your sun lounger this summer!

In order to do this properly, you're going to need some way of documenting your decisions and doing a few calculations. Whether you're a spreadsheet person like me or a notebook person, just make sure you've got something to hand so that you can write down your answers as we go and work a few things out.

How much do you want to earn?

First question, the uncomfortable but essential one. How much do you want to earn from your private practice? What income makes all of this effort worthwhile for you? Forget any comparisons or what you think you should expect. Just think about what is going to make this truly rewarding for you, and write down the annual and monthly figure.

How much time will you spend working?

Then think about how many weeks of the year you will actually work. So consider holidays, sick time, unexpected work interruptions due to caring responsibilities. For many parents, you can only realistically expect to work 40 weeks of the year. Sometimes less, for me it is less because of the needs of my children.

If you're the one that is responsible for taking school holidays and sick days off, or you've got any other caring responsibility that means you're going to have to be the person that drops everything if something changes, you need to factor that in. Write down now how many weeks you actually think you're going to be able to work.

Then you need to think about how many hours in those weeks you will work in total, including your admin and your business development time, and write that down.

Next you need to consider how many of those working hours you want to spend in front of a client? You can't spend every minute in your practice working with clients. There's lots of other stuff that you need to do to run a business successfully. So you most probably already have an idea of what your personal threshold for therapy hours is. I think of it in terms of my ability to do my best work. I know that I do my best work when I have about three therapy clients a day in the diary. I can see more than that and survive, and I have done, and I did do for many years. But one of my values is giving a really high quality service to my clients. I like time to think, formulate, read around. I'm not just showing up and going back to back with clients anymore. I've done it, didn't like it, I prefer working the way that I do now, so I personally don't go above three. But this is wildly personal and it will depend on what other stuff you have going on in your life. So think about what that number is for you right now and write that down. But know that you can always change it if your personal circumstances change.

Now you're going to use the number of weeks that you expect to work and the weekly number of client facing hours that you've come up with to generate your annual number of client hours, and write that down.

What services do you want to offer?

Next, think about what kind of services you want to offer. It could be therapy, supervision, consultation, coaching or group sessions. We're not thinking about the long term here because this is all about kick starting your practice for September. So think about what's going to be the easiest way for you to bring money into your practice and write that down too.

Where will you work?

Next, consider whether you want to work online or in person or offer a hybrid. If you're choosing to work online, get some quotes for local therapy rooms and estimate the monthly and annual cost to you.

Other costs

Next, you need to add up your costs. Include all the software that we talked about in the last lesson, insurance premiums, add a £1000 a year CPD budget, or more if you know there's something more expensive than that that you want to do. And also add in £350 per month for admin support for a full time practice (less if you're working less hours), and whatever rental you've estimated so far, pop that in as well. Don't be afraid of this. You're just estimating it really roughly for now. And keep those annual and monthly figures to hand.

This is why I find a simple spreadsheet really helpful, because you can just organise all this information and see it really clearly. So now you have all the information that you need to set your fees.

Week three task

Your task is to go and listen to Sally Farrant's podcast episode, which I've linked to in the show notes, and work out your minimum fee.

This is the fee that you need to charge in order to earn the salary you want to earn from your private work. And you will know that you can never charge below that without compromising on your salary and that knowledge is power, especially when something like imposter syndrome tries to convince you to drop your prices.

So, your 30 minutes this week is going to be spent listening to Sally's podcast episode, which may actually take slightly more than 30 minutes, but is very doable on a sun lounger, so I hope you won't mind, and make those key decisions about your working life and write those answers down in a spreadsheet. I want you to know your minimum fee before you come back for next week's lesson!