Why You Gotta Go and Make Things So Complicated? Counseling Business Plans

I need to hire more people. I need to buy a building. I need more office staff. The desire to grow big and grow fast seems to be the cry of so many mental health practice owners. But why? Profit and loss tend to stay the same whether a practice is big or small. Problems tend to multiply as a practice grows. Although The Big Practice may seem like the ultimate life accomplishment for many mental health entrepreneurs, the funny thing is, it can lead to burnout and increase the chances of failure. For those of you ready to grow strategically let’s look at three counseling business plans so you can pick one that doesn’t break the bank, eat up your time, complicate your life or compromise your license.

Three Counseling Business Plans

Plan 1: The Storage Facility

Everybody knows what a storage facility is. Sometimes I think of it as the perfect business plan: people park their stuff, leave, and pay you monthly. No tenants screaming because they saw a roach in the kitchen, minimal systems to maintain, and you can just get some cameras and operate everything remotely. The Storage Facility model really is a thing of beauty. What’s needed? Office space and excellent renters.

As the owner of a ‘Storage Facility’ model, you aren’t limited to mental health providers. You can lease space to anyone you want. Your primary goal? Rent. Your primary focus? Renters who either a.) rarely come to the office and so use minimal resources like AC and toilet paper, b.) are excellent at business so they will be reliable rent-payers, c.) in a business you know nothing about and so require very little support from you, or d.) all the above. Once you purchase or lease the building and fill your spaces, just sit back, and collect rent.

Good examples of this model might be:

• Build or purchase a building and rent it out to accountants, lawyers, auto mechanics, or other reliable rent-payers.
• Rent a block of offices and sublease to the same reliable rent-payers.

Plan 2: The Apartment Complex

The Apartment Complex model is a little more, well, complex. You’re going to park mental health providers with full client caseloads in your offices so you will need to supply more than just electricity, toilet paper, and AC. But what exactly does that mean? How do you add value to your business, so your mental health provider tenants stay happy?

Adding value can mean offering a kick-ass brand, agreeing to manage files in your HIPAA compliant file storage, and staffing your office with smiling faces who answer phones and vacuum. Adding value can also mean fresh coffee in the waiting room and plenty of toilet paper in the bathroom cabinet. You see, Apartment Complex tenants not only want an experience for themselves, they want an experience for their clients. If they are happy, and their clients are happy, then they can do more marketing, do their job more efficiently, and stay out of trouble. Hopefully, happy, prosperous, HIPAA-compliant mental health provider tenants pay their rent on time too.

But what about happy tenants who pay rent but aren’t the greatest? Perhaps they don’t keep up with their paperwork, and you know this because you monitor the EMR system. Maybe they have tremendously full schedules, but they are consistently late to work so clients complain to you. You notice they seem to take weeks or months off with mysterious illnesses or family emergencies and become difficult for you and their clients to find. Now you, the Apartment Complex owner, are worried about HIPAA violations, unhappy clients, and complaints to the licensing boards. Storage Facility owner with bad tenants? Evict them. The Apartment Complex owner on the other hand? You face addressing, disciplining, and possibly evicting a rent-paying, feeling, possibly complaining tenant with a caseload full of feeling, possibly complaining clients.

Big Practice owners must balance the roles of nurturing mentor with consequence-giving manager. We call this a dual relationship. If you are a clinical supervisor operating the Apartment Complex model without another person serving as your manager, that dual relationship becomes a tight rope you walk every day. How do you get your supervisees to trust you when they know you may evict them if they don’t turn their notes in on time? Hiring a manager or administrative supervisor can help, but ultimately it falls to you, the boss, to follow through.

Plan 3: The Strip Mall

The Strip Mall is my favorite because it rents for success. Go to a Target in Texas and see what I mean.  When you see a Target, you’re probably also going to see a Ross, a Pet Smart, and a DSW Shoe store. It’s a formula. The owner builds a strip mall and leases it to solid anchor stores that have a reputation for turning a profit. The strip mall does not provide storage systems, run credit cards, provide employees, or offer staffing retreats. Instead, the strip mall rents to established, profitable, stand-alone businesses who already know what they're doing.

In a Big Practice this can look a lot like the Apartment Complex with one major difference; you the Big Practice owner have no stake in your tenant business. In fact, this model works best when your tenants have their own PLLC, their own filing systems, and their own merchant accounts. You may add value by offering them a beautiful location, a spot on your highly visible and SEO-optimized website, a ride on your coattails because you are such a well-established name in your community, and perhaps some administrative support like phone answering, but other than those things you are laissez faire.  Your PLLC tenants handle their own paperwork (less liability for you), their own schedules (their clients, their problems), and their own money. At the end of the month, they pay a flat fee to you (no w-2 or 1099 hassles).

Grow Better

At this point you may be asking, why would anyone want to rent space in my Strip Mall if they have a well-established stand-alone business? Great question, and I would argue, the most important question for any business owner who wants to grow better not just bigger. Adding value is going to be your primary focus and it will take time to establish. But isn’t that better than chasing down rent and giving verbal warnings to slacker tenants?

Growing so that you don't break the bank, give away all your time, complicate your life and compromise your license is important if you want to stay in business. If you truly want to be ‘big’ then do it strategically and always put your needs first. Growth doesn’t have to be complicated so keep an eye on your profit and loss. If you don’t see an increase in profit but you notice more liability and headache, go back, and review our models. Remember you are too important to lose to things like getting so big you burn out, get in trouble, go broke and give up. Your community needs you. #counselorsforlife #counselorsdontquit.