Private Practice Olio

Started by WisNeuro
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AcronymAllergy said:
For therapy, I'm completely guessing, but if assuming $150/hour, you need to see 27 patients/week to hit numbers similar to the first example above (i.e., $190k gross). That doesn't sound horrible.
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Back to this, my napkin math typically assumes 4-5 weeks off a year and about 30-40% in taxes and expenses before net income, some of which would probably be distributed to me in earnings and some would be distributed to me as a reasonable salary. Is this right? Too conservative? Depends?
 
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WisNeuro said:
Agree, people definitely do think about the tax breaks, or the extra opportunities to shield revenue from taxes when they are comparing the two. Also, I see a lot of people dismiss PP revenue as "that's before taxes!" as if their W2 paychecks don't have taxes. Either way, if people are thinking about the two options and don't have a solid grasp on taxes and other business stuff, they'd probably be better off in consulting with a financial specialist who has knowledge in their area about what this could look like so they can compare some real numbers. You also bring up a good point, even if I don't make a lot more than I did in a hospital job and was just breaking even, I'd still go PP if just for the significant flexibility that I have. It's been huge with kids and other non-work responsibilities.
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This is sort of the rub for me. My org pays me a pretty competitive salary for straight clinical work (toward the upper end of Sanman's above scale), I work four days a week, and have great benefits. For kids, clinical work would require me to work nights and weekends so I worry that I would be actually spending more time away from them than I would like. I think eventually I would like to be in a free agent just to dictate my own schedule and have the experience of hard work = more money for me personally. Right now, I'm one of the highest earners in our system for my position and don't really see much gain from it.
 
R. Matey said:
Back to this, my napkin math typically assumes 4-5 weeks off a year and about 30-40% in taxes and expenses before net income, some of which would probably be distributed to me in earnings and some would be distributed to me as a reasonable salary. Is this right? Too conservative? Depends?
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You can limit the taxes quite a bit with shielding, and overhead will completely depend on your area (e.g., rent). I pay a lower figure in taxes/expenses than that. But, I'm also not operating a physical office in say, a NYC/Boston/San Fran area.
 
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R. Matey said:
Back to this, my napkin math typically assumes 4-5 weeks off a year and about 30-40% in taxes and expenses before net income, some of which would probably be distributed to me in earnings and some would be distributed to me as a reasonable salary. Is this right? Too conservative? Depends?
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The funny part is that the math is different for everyone. I get 11 federal holidays and I have 9 weeks of annual leave racked up. That means I only have to work 41 wks this year not counting sick leave. That would hurt in PP.
 
Sanman said:
The funny part is that the math is different for everyone. I get 11 federal holidays and I have 9 weeks of annual leave racked up. That means I only have to work 41 wks this year not counting sick leave. That would hurt in PP.
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Did VA increase the annual leave limit for psychologists finally? I remember at least once or twice, I lost ~20 hours because I just forgot to take leave before the use-or-lose date hit. I really wish VA were like some other systems that let you buy back the time.
 
AcronymAllergy said:
Did VA increase the annual leave limit for psychologists finally? I remember at least once or twice, I lost ~20 hours because I just forgot to take leave before the use-or-lose date hit. I really wish VA were like some other systems that let you buy back the time.
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Should be the same. I get 20 days per year and can roll over up to 30 days before use or lose starts. COVID led to lots of rollover.
 
WisNeuro said:
I am not familiar with this, can you say more? Always looking for adequate tools that do not require a monthly subscription
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It's just an adobe replacement. One time purchase of ~$120, compared to $19/month for adobe.

Seems work better, without having AI forced down my throat. With adobe, OCR for a large series of documents wasn't finished after 24hrs. Wondershare did OCR for the same series in under 3 minutes.
 
thebalmofhurtminds said:
@WisNeuro (and anyone else), did you ever switch from using excel documents to track revenue and expenses or still doing that yourself?
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Honestly, my stuff is still pretty simple, I can spend like an hour or two every quarter and be up to date on this. I have it organized in a manner that my CPA can use easily.
 
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Haven’t posted here in a while. Update is that the business almost went under and I was at the brink of needing to get a job. 🤢
At one point we had six months of operating reserved and we made a couple of expansions. The main source of revenue for my business was a private pay community based wraparound program. We expanded about two years ago. At first it was looking promising, and we were not making a profit but investing in building capacity. Then last year the wheels came off. Several prospective patients didn’t show, several of our longer term patients left, our main referral source went out of business. We started bleeding money dramatically. In August and September several staff moved on as they got licensed and I didn’t make them offers, obviously. Then in November I decided to shift to a state funded wraparound program and that took way longer to get rolling than we could tolerate so had to lay off the remainder of our employees except one part time in March.

In May we started our first Medicaid wraparound patient and we have our second coming on next week. It has been a slow process but with the cut in expenses and new revenue coming online. We made a profit last month for the first time in two years. Our part time guy is leaving and we are hiring a full time person on Monday. Starting and running a business can be brutal and is not for the faint of heart that is for sure. We are well situated to expand this line of the business and the referral stream should be more resilient. Stay tuned. 😊
 
Wow. That’s definitely a lot. It’s not all puppies and rainbows in PP, which I learned quickly.

Back when I started my PP, I was about 5mon in when I contracted long COVID; navigating that as a biz owner was a rough learning curve. I wish I did a PPP loan, but I trusted I had enough cushion and didn’t want to take money that I didn’t absolutely need, which was stupid in retrospect. So many grifters profited and I got by, barely.

I was able to hold onto my three contractors, but I bled through 6+ mon of reserves over the next year and a half. Back then I was doing 80%+ legal work, which allowed me to work when I could, and deal w all of the medical stuff the rest of the time. This was the first time I learned about the swings in cash flow that can occur in PP, especially for low-volume high $ cases boutique practices like mine.

When “Rapey Don” took office, it disrupted my legal referrals for 4-6mon bc of the uncertainty when RP was targeting law firms and insurance companies weren’t sure about possible changes. I took on more clinical work and consultation, but that paid way less, so I got squeezed, again.

Doing better now, but I’m still not back to my 6-8mon in reserves, so until then I’m keeping a lean budget and cut out all conferences and any extraneous biz spending.
 
Therapist4Chnge said:
Wow. That’s definitely a lot. It’s not all puppies and rainbows in PP, which I learned quickly.

Back when I started my PP, I was about 5mon in when I contracted long COVID; navigating that as a biz owner was a rough learning curve. I wish I did a PPP loan, but I trusted I had enough cushion and didn’t want to take money that I didn’t absolutely need, which was stupid in retrospect. So many grifters profited and I got by, barely.

I was able to hold onto my three contractors, but I bled through 6+ mon of reserves over the next year and a half. Back then I was doing 80%+ legal work, which allowed me to work when I could, and deal w all of the medical stuff the rest of the time. This was the first time I learned about the swings in cash flow that can occur in PP, especially for low-volume high $ cases boutique practices like mine.

When “Rapey Don” took office, it disrupted my legal referrals for 4-6mon bc of the uncertainty when RP was targeting law firms and insurance companies weren’t sure about possible changes. I took on more clinical work and consultation, but that paid way less, so I got squeezed, again.

Doing better now, but I’m still not back to my 6-8mon in reserves, so until then I’m keeping a lean budget and cut out all conferences and any extraneous biz spending.
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I'm moving from the boutique style practice to a more sustainable model and the learning curve for how to run a business can be steep. The fact that we both weathered the storm is probably the important part. Hopefully, I have learned and will be stronger. It sounds like you and I learned a similar lesson I am going to keep it lean too and grow sustainably and not confuse potential business with actual business and I have a much better understanding of revenue streams and referral sources.
 
For me, I briefly considered growing my practice enough to replace myself so I could just do legal work and have a neuropsych, tech, and some counselors around to handle clinical work. I realized that I just don’t have the patience for that long-term and it complicated my desire to work/live abroad (part-time) in the coming years. Two years ago I worked 3+ months remotely, usually 1-2+ wk at a time to test the setup.

My last psych tech had to relocate for his spouse’s career, and I decided not to replace them. Now I only take neuropsych evals for legal cases and I limit my clinical evals to pre-surg and briefer batteries since I’m not using a tech.

In a perfect world, I’ll be able to expand my non-clinical consulting work, legal education speaking gigs, and live/work abroad doing record review for 3-6 weeks at a time. Clinical work is fine for now, but I’m hoping to phase it out in the coming years.
 
smalltownpsych said:
Haven’t posted here in a while. Update is that the business almost went under and I was at the brink of needing to get a job. 🤢
At one point we had six months of operating reserved and we made a couple of expansions. The main source of revenue for my business was a private pay community based wraparound program. We expanded about two years ago. At first it was looking promising, and we were not making a profit but investing in building capacity. Then last year the wheels came off. Several prospective patients didn’t show, several of our longer term patients left, our main referral source went out of business. We started bleeding money dramatically. In August and September several staff moved on as they got licensed and I didn’t make them offers, obviously. Then in November I decided to shift to a state funded wraparound program and that took way longer to get rolling than we could tolerate so had to lay off the remainder of our employees except one part time in March.

In May we started our first Medicaid wraparound patient and we have our second coming on next week. It has been a slow process but with the cut in expenses and new revenue coming online. We made a profit last month for the first time in two years. Our part time guy is leaving and we are hiring a full time person on Monday. Starting and running a business can be brutal and is not for the faint of heart that is for sure. We are well situated to expand this line of the business and the referral stream should be more resilient. Stay tuned. 😊
Click to expand...

Therapist4Chnge said:
Wow. That’s definitely a lot. It’s not all puppies and rainbows in PP, which I learned quickly.

Back when I started my PP, I was about 5mon in when I contracted long COVID; navigating that as a biz owner was a rough learning curve. I wish I did a PPP loan, but I trusted I had enough cushion and didn’t want to take money that I didn’t absolutely need, which was stupid in retrospect. So many grifters profited and I got by, barely.

I was able to hold onto my three contractors, but I bled through 6+ mon of reserves over the next year and a half. Back then I was doing 80%+ legal work, which allowed me to work when I could, and deal w all of the medical stuff the rest of the time. This was the first time I learned about the swings in cash flow that can occur in PP, especially for low-volume high $ cases boutique practices like mine.

When “Rapey Don” took office, it disrupted my legal referrals for 4-6mon bc of the uncertainty when RP was targeting law firms and insurance companies weren’t sure about possible changes. I took on more clinical work and consultation, but that paid way less, so I got squeezed, again.

Doing better now, but I’m still not back to my 6-8mon in reserves, so until then I’m keeping a lean budget and cut out all conferences and any extraneous biz spending.
Click to expand...


Sorry to hear about the difficulties in both cases, but I am glad you both chose to share this as it is something that we often don't hear about outside of the odd friend or colleague. Its important to keep a balanced view for those that may go into this without the reserves to recover.
 
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Sanman said:
Sorry to hear about the difficulties in both cases, but I am glad you both chose to share this as it is something that we often don't hear about outside of the odd friend or colleague. Its important to keep a balanced view for those that may go into this without the reserves to recover.
Click to expand...

Yeah, I've seen more than a few people who essentially draw everything out at years end and don't leave anything in their business accounts. You should always build up your business accounts and have a certain amount sitting there for unexpected costs or downturns. And there are ways to keep those reserves getting some income/interest while still being available in the short term.
 
Some thoughts for @smalltownpsych & t4c:

1) File IRS Form 2553
2) Get Bradford Street Paydex number
3) Use #2 to get an unsecured line of credit for your LLC


4) @R. Matey You're thinking of "net" incorrectly. You don't want ANY net.

Example Hollywood: RM, Inc is a subsidiary of ACME film. RM, Inc produces a film called "Summer Trash 26". RM Inc has offered to pay the star $1MM upfront, and 5% of the net for the film. In the fine print, RM is required to use ACE Marketing and ECA Distribution for those services. Both companies are owned by ACME Film. Summer Trash earns $100M at the box office. However, ACE Marketing sends a bill for $50M for marketing, and ECA Distribution sends a bill for $50M for distribution. RM, Inc tells the star that the film was a bust. Because ACE and ECA are S corps, or are treated like such, they can offer dividends to their owners. Dividends are taxed at 15%. Now RM Inc has netted zero, ACME film has grossed $100M, but their tax liability has gone from ~$30M to ~$150,000.00, and they get to avoid a $5MM payment to the star.
 
Not sure if this is a good thread to ask this question, but for neuros with their own private practice, what has been the most compatible EHR? I am looking to start a private practice and most of the EHRs I've been looking into seem more geared towards therapy practices. Any that you would absolutely not recommend?
 
Here's a tip for all the aspiring PP folks from real world experience, keep a back up office chair around for when your regular chair randomly breaks and you have more patients to see. Recently had the gas cylinder go on my rather old Aeron. Had to run out and grab a back up quickly. Luckily it happened at the end of my day.
 
Chairs:

1) I’d highly recommend choosing leather for all patient seating. Learned that one after the first time a female patient had a menstrual accident on my sofa.
2) One of the weird components of ADA is the requirement for a "bariatric chair" in your waiting room.
 
Sanman said:
Question for the pp folks, especially s-corp. How did you determine your reasonable salary? BLS average or other data? Just picked a number?
Click to expand...
Austin Powers One Million Dollars GIF


Couldn't resist
 
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