This content is provided by zynnyme, an affinity partner of AAMFT. This information is not necessarily the view of AAMFT and should not be interpreted as official policy.
As therapists, our job is often to sit with people’s fears and anxieties. But what happens when WE are anxious? With growing uncertainty about the economy and global crisis happening many therapists are asking themselves whether owning a private practice is truly sustainable during a recession. Today, we want to talk about some real data, and real options to recession proof your private practice as a therapist.
"Wait, does that mean you think we are going into a recession?" Whether we go into a recession next month or in the next decade, we want to share what every therapist who plans to grow, launch, or maintain a private practice should do to recession proof their private practice. Ultimately, we aren’t financial analysts, and even they can’t always agree!
So, why do you get to talk about recession proofing private practices?
In 2008, Miranda over at zynnyme launched her cash-pay private practice during the recession in one of the worst-hit cities in the United States. And guess what? It flourished. Kelly built her practice during the recession in a city saturated with therapists.
We know every recession is different, but we think there are lessons we can bring forward from our pasts that help us to navigate our futures.
Defining a Recession
A recession, by definition, is “a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.” Effects of a recession often include high unemployment rates, defaults on loans and mortgages, and a flurry of public policy decisions related to managing the change in cash-flow AND attempts to stimulate the economy.
Worst Jobs During a Recession
According to Yahoo Finance and their analysis of employment data from the downturns in 1990-91, 2008-2009, and 2013, the following were the worst jobs to hold during the recession: tradesmen (plumbers, construction, etc.), manufacturing workers, CEOs, drivers, farmers, and finance workers. While many therapists “feel” like mental health and helping professions are the first to go and the least needed, this actually doesn’t align with the data.
A Recession-Proof Business
In fact, every list of recession-proof industries we could find (like this one) included healthcare. Some lumped mental health in with physical health; other lists listed psychologists, social workers, and others as the jobs least impacted by previous downturns and recessions.
Statistics Are Great, But What Happens in Real Life?
Here’s a bit of Miranda’s story: I quit my county job with amazing benefits in the spring of the height of the 2007 recession after receiving a clear message from my higher power that it was what I was supposed to do (it was literally written down on a slip of paper!). I was already teaching and had jobs at a local junior college and at a local university. In October, I started a cash-pay private practice. People thought I had lost my mind.
I hadn’t been licensed long enough to get on insurance panels. I knew VERY little about how to run a business. And I had a child that I was nursing at home. I built my business, designed my website, and learned online marketing during my child’s two naps during the day. He didn’t sleep well at night (and if he skipped a nap during the day, the nighttime restlessness got even worse).
I knew what I was supposed to be doing, so I kept my blinders on and just took one small step at time, day-by-day and week-by-week. I had a great clinical reputation at the local psychiatric hospital and with agencies, but people I respected said they’d only start referring to me once I was on insurance panels… you know, the ones I couldn’t get on because I hadn’t been licensed long enough.
I figured once I was eligible for insurance panels, I’d consider them if my practice wasn’t full or growing. Then, guess what? It grew! People hired me, they came to see me. Couples on unemployment budgeted for couples counseling while living with their parents because their relationship was EXTRA important during the recession.
That cushy county position with the great benefits that I left? They started doing furloughs and reducing benefits, and my old coworkers had to manage with decreased income while I was able to adjust my income. In fact, my spouse’s industry was eventually impacted by the Great Recession, he was laid off, and I was able to adjust my business plan and hours to ensure that we could pay our mortgage while he went back to school.