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.
Good Businesses to Start in a Bad Economy
Apparently, my story is not isolated. Entrepreneur Media lists healthcare as a good business to start in a bad economy.
How to Survive (and Thrive) During a Recession
Business Horizons is a peer-reviewed scientific journal that provided recommendations on strategies to prevent economic recessions from causing business failures. Their recommendations include:
- Positioning the company in multiple markets and geographies
- Planning to confront declining sales
- Maintaining advertising
- Attracting new customers
- Finding alternatives to price cuts
- Preparing for economic recovery
But does this really apply to the healthcare and helping professions? Here are things we’ve heard consistently over the years when recessions, inflation or anything else starts to make us question the future. “Therapists can’t sustain a practice based on cash-pay while unemployment rates are up.” “We can’t afford to spend time marketing and working on our businesses.” “We need to increase our caseloads and decrease our fees, right? Isn’t that the right, ethical thing to do?” “You better get on insurance now- that is the only way to sustain in a down economy.”
Reality check: Your Business Needs to Stay Open to Help People
Expenses do not magically decrease because the economy is struggling. Your fee should be based on a sound business plan, expenses, and your needs for taking care of your household. In fact, during the Great Recession, my needs for my income went UP as we came close to being a single-wage family. I still had childcare costs as my husband was laid off and went back to school, since he couldn’t find a position; my office lease didn’t magically reduce; my landlord’s mortgage didn’t magically get refinanced.
Still, people needed me more than ever. I needed to show up for work not worried about whether my house was going to get foreclosed on. I needed to know that I’d be able to buy groceries. No, I did not contribute to retirement during that time—I figured I’d have time to catch up later.
There were adjustments I could make based on my life and situation. Yet, at the end of the day, I needed an income to maintain doing the work. So, I made adjustments to my business plan. I didn’t hide. I didn’t assume no one needed therapy. I kept showing up in the world—even though my town of Modesto was one of the worst-hit cities by the Great Recession, with unemployment rates at 17.5%! There I was, with a waiting list of private pay clients with more people than I could ethically see.
Let’s Create a Recession Proof Plan: What You Need Right Now:
You need vision, motivation, a plan, and support to keep moving forward. YES, you can maintain a private practice during a recession. YES, you can START a private practice successfully during a recession. And YES, you can conquer the burnout you’re probably feeling from everything going on in the world and ensure you can proactively address it in the future.
Get Support to Create a Workable Private Practice for YOU!
We’ve been helping people grow, launch, and revamp private practices since 2010. What we’ve found again and again is that success does not happen alone in a vacuum. You need support and that is normal. Here are our top suggestions for creating a workable plan for you:
Step 1 to Recession Proof Your Private Practice:
Get crystal clear on your private practice vision. If you aren’t fully on board with your vision due to burnout, questions about whether you still want to be a therapist, or distractions of whether you should get a job or be in practice, it is going to show up in the way you relate to your business. And guess what happens when we are ambivalent in our relationships? They falter. The relationship with your business is similar to your relationships with other humans. Check out this free vision training as a starting point to see what comes up and get some clarity about what YOU truly want and need.
Step 2 to Recession Proof Your Private Practice:
Let’s create a workable business plan for your therapy practice. The truth is you can’t magically make your living expenses going away. We are already the worst paid master’s degrees. We often set our fees based on what others are charging, or what insurance is reimbursing. Unfortunately, what insurance reimburses in some areas of the country can be $33 a session- in 2023! And no, this isn’t in places with a low cost of living. So, let’s take our head out of sand and get crystal clear. Take the free How to Set Fees training that will walk you step-by-step through how to calculate your fees here.
Step 3 to Recession Proof Your Private Practice:
Finally, having a vision and a business plan means nothing without a way to reach the people who need you. Check out our free Marketing Masterclass for Therapists. It is four days. We know it is a big commitment, but it is absolutely free, and others charge up to $5000 for a training like this one. We want the resources to be there and available for anyone regardless of means. Click here to sign up and get started.
We hope this helps you today. You are needed now more than ever. As of December 4, 2023, there are 450,000 searches per month for the phrase “therapist near me”, 135k for “counselor near me”, 90k for “psychologist near me”, and 110k for “marriage counselor near me”. And that isn’t even including the searches for therapists in specific cities and with certain specialties.
You are deeply and desperately needed today, let’s create a sustainable way to meet the needs.