Many of y’all know that I have been using TherapyNotes as our practice EHR for over 10 years now. I’ve looked at others and I keep coming back to TherapyNotes because they do it all. If you’re interested in an EHR for your practice, you can get two free months of TherapyNotes by going to thetestingpsychologist.com/therapynotes and enter the code “testing”.
This episode is brought to you by PAR. PAR offers the SPECTRA Indices of Psychopathology, a hierarchical dimensional look at adult psychopathology. The SPECTRA is available for paper and pencil assessment or administration and scoring via PARiConnect. Learn more at parinc.com/spectra.
[00:01:00] Hello folks. Welcome back. We are talking about money again today. I’ve talked on the podcast before about Finances and how I have not always had a positive relationship with finances. I told the story of how I completely avoided money in my practice for several years after starting and then discovered one day that clients owed me almost $100,000 that had accumulated over the last few years. Since then, I feel like I have been on a mission to dive as deep as possible into business finances, to, hopefully, make sure that the businesses I’m running are sustainable.Today, I am talking through my personal process for setting, planning for, and hopefully, reaching those financial goals. So listen in. I hope that you can take away some actionable tips for setting your own goals, planning for those goals, and measuring those goals.
[00:02:00] All right, everybody. Let’s dive right into it.I thought that I knew a lot about business finances, and in truth, I think I do know quite a bit about a very specific type of business, namely Mental Health Private Practice with therapy and testing as the main service lines. But I will say this, I had a huge wake-up call when I started my software business.
Fortunately, I partnered with two very experienced individuals with a much broader picture of financial forecasting, but I was totally unprepared for what “real financial modeling” looked like. About 18 months ago, we started building the models for our software business, and about six months ago, we worked with [00:03:00] a CFO who took this whole process to an entirely different level.
This guy designed and trained us, and by us, I mean, mainly me because I’m at this point serving as the COO of our software company, but he designed and trained us on a financial or budgeting model that no kidding had about 20 different sheets within the same spreadsheet that were all interconnected and accounted for literally anything and everything that could possibly happen in the business in terms of expenses and revenue. They were all tied together. They all changed. If you change one cell in sheet 17, it would cascade over to two other sheets and then flow through to the main dashboard sheet. It’s incredible and overwhelming for that matter.
You may wonder why am I telling you this. Because [00:04:00] it drove home the point that math can solve a lot of problems. Math can solve a lot of anxiety. I’ve said this on the podcast before. It drove that point home to me. I thought I knew that you could break things down, do some forecasting, do some planning, and be in pretty good shape, but this next-level spreadsheet showed me that it is 100% true. You can do a really good job forecasting, modeling, and predicting with just a lot of math.
The problem is that many of us avoid setting financial goals or starting to set financial goals. Or we may try to do financial goals, but then we stop before the most important part, which is mapping those goals onto measurable actions and creating metrics to keep track of [00:05:00] over time to see if you’re even reaching those goals.
What do I mean by this?
I want to take a simple example of setting and reaching goals and compare two styles. The first one is what I’ll call a vague style and the second one, which is my preference and the process that I go through, is very specific. Even though this is just an example, the numbers aren’t exactly right, the language that I’m using in this specific example is very close to how I work things out in my mind when I’m setting goals.
Step 1: Talking about setting the goal.
Vague approach. I want to make more money.
Specific approach. I want to make $25, 000 more during 2025 so that I can take an incredible vacation for about $10, 000 and contribute an extra $15, 000 to my retirement fund.
[00:06:00] What is the takeaway from these two scenarios?The takeaway is that I like to specify exactly how much I hope to make or change my income and name a reason or reasons why I want to make the extra money. I think without both of those components, you are a little bit adrift in this whole process. I mean, you can set goals on making a certain amount of money, but if you don’t know why, then it might start to fade away and not seem as important after a certain amount of time.
Let’s move to step 2, which I am calling operationalize the goal.
Vague approach. I want to make more money. I guess that means seeing more clients.
The specific approach. How can I make that extra $25, 000? Well, that breaks down to$ 2, 083 per month. I [00:07:00] charge $185 an hour. So that means I need to bill just over 11 more hours per month or about three hours per week to reach this financial goal.
A quick note on that. If you don’t want to bill more hours, you could just raise your rates. An example would be, I want to make an extra $25, 000 and I do about 100 evals a year. So I need to raise my rates by $250 per evaluation.
What’s the takeaway here?
A vague goal leaves no room for operationalizing. You are stuck before you even get out of the gate. You’re stumbling blindly toward the goal without any means of knowing if you hit it or how to hit it. I like to break it down as specifically and granularly that’s possible.
Let’s take a break to hear from a featured partner.
Y’all know that I love TherapyNotes, but I am not the [00:08:00] only one. They have a 4.9 out of 5-star rating on trustpilot.com and Google, which makes them the number one rated Electronic Health Record system available for mental health folks today. They make billing, scheduling, note-taking, and telehealth all incredibly easy. They also offer custom forms that you can send through the portal. For all the prescribers out there, TherapyNotes is proudly offering ePrescribe as well. And maybe the most important thing for me is that they have live telephone support seven days a week so you can talk to a real person in a timely manner. If you’re trying to switch from another EHR, the transition is incredibly easy. They’ll import your demographic data free of charge so you can get going right away.
So if you’re curious or you want to switch or you need a new EHR, try TherapyNotes for two months absolutely free. You can go to thetestingpsychologist.com/therapynotes and enter the code testing. [00:09:00] Again, totally free. No strings attached. Check it out and see why everyone is switching to TherapyNotes.
The SPECTRA Indices of Psychopathology provides a hierarchical dimensional look at adult psychopathology. Decades of research into psychiatric disorders have shown that most diagnoses can be integrated into a few broad dimensions.
The SPECTRA measures 12 clinically important constructs of depression, anxiety, social anxiety, PTSD, alcohol problems, severe aggression, antisocial behavior, drug problems, psychosis, paranoid ideation, manic activation, and grandiose ideation. That’s a lot. It organizes them into three higher-order psychopathology spectra of Internalizing, Externalizing, and Reality Impairing.
The SPECTRA is available for paper and pencil assessment or administration and scoring via PARiConnect. You can learn more at [00:10:00] parinc.com/spectra.
All right, let’s get back to the podcast.
All right. Step 3: I’m going to call it plan for the goal.
Vague. Since I need to see some more clients, I should probably do some more marketing. Okay. It’s one approach.
The specific approach. Three extra hours per week, that averages to about one extra evaluation per month. I know that my conversion ratio for booking evaluations is 50%. So I need to get two more referrals each month to reach my goal of actually following through with one evaluation. I’m going to reach out to my top five trusted referral sources and let them know that I have a little more availability. If I don’t see an increase in referrals within one month, I’ll reach out to a few new referral sources and consult with my Google ads team.
The takeaway with this one. You’re [00:11:00] starting to get the picture. I’m sure. Vague goals sabotage this whole process. Again, no idea what I’m working toward or how to get there when the goal is vague, but specific goals let you plan how to reach them.
So if you’re hearing all this and thinking, I don’t know my conversion ratio or how much I make per hour or any number of these details or metrics that I’m throwing out there, the good news is you should be able to easily pull this information from an EHR or QuickBooks or some other software. It should be out there relatively easily to find.
All right. Step 4: I’m going to call this the most important part in the whole process, and that is measuring your goal. Literally, just earlier today before I was recording, I was looking at my progress toward my 2024 consulting income goal and confirmed that I was on track, a little ahead, actually, which was great. But the [00:12:00] question is, how did I know I was on track? Well, because I went through this whole process and did these three steps back in late 2023. So I knew what I was working toward, I knew why, and I knew what the plan was.
In this case, measuring the goal is the part that many of us I think forget to do. In the vague scenario, you don’t even know what you’re measuring. It’s just a black-and-white question of, did I make more money or not? Which is something that’s fine, but was it $1 more or $300,000 more? There’s nothing to anchor into or reason to even anchor.
In the specific example, you can measure as often as you would like because you know what you’re looking toward and you have all kinds of metrics to bank on. So you could look at hours billed per week. We know that we’re shooting for three. We could look at referrals per month. We know we’re shooting for two [00:13:00] extra and converting one of them. We could look at income per month. We know that we’re shooting for a little over $2000 extra. That’s the cool thing about a specific well-planned goal is that there are usually multiple ways to measure that progress.
And so the takeaway from this step is measuring progress is the only way to know if you’re reaching your goals or not. And then depending on what comes from that, you know what to do. You can tweak your plan. Maybe you’re overshooting. Maybe you are overly successful and need to dial it back. Maybe you are not quite reaching your goals and then you can turn it up a little bit. But if you’re not measuring, you have no idea what you’re doing.
In my experience, this is one of those easier-said-than-done situations. Full disclosure, I’ve recognized over the years that my brain works this way. [00:14:00] Trust me, I have many areas where my brain just doesn’t work, but I know not everyone’s brain works in this way where it’s goal-driven, metric-driven, math-oriented, whatever you want to call it. I know not everyone’s brain works that way. That is totally okay. The cool thing is that there are plenty of ways to keep yourself accountable and work through this process, even if this is not something you gravitate toward.
You can find a good financial person to help you in many places. It could be your partner, it could be a practicing colleague, it could be somebody in a different industry or a friend, your financial team like your accountant and bookkeeper, or it could be a coach or a consultant. So it’s a habit that has been built over time. Like I said, I started in a very naive place and it really bit me. And so I [00:15:00] decided to change that. And that’s been super helpful over the years, but it’s taken time. So it’s a habit that’s been built over time. You don’t have to master it right away by any means.
I tend to do big goal-setting stuff in September or October for the upcoming year. And for something like this, I would probably set aside at least two hours. You might not take that long, but then again, you might depending on how comfortable you are with the process, the numbers, and so forth. So simply setting aside the time is a perfect first step.
If you do want any support in this process, you are welcome to reach out. I love talking with people about finances, and goals, and breaking things down into actionable steps so that it demystifies the process a little bit. Either way, good luck with setting your goals, breaking them down, getting them measured, and [00:16:00] seeing some success.
All right, y’all. Thank you so much for tuning into this episode. Always grateful to have you here. I hope that you take away some information that you can implement in your practice and your life. Any resources that we mentioned during the episode will be listed in the show notes. So make sure to check those out.
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If you’re a practice owner or aspiring practice owner, I’d invite you to check out The Testing Psychologist Mastermind Groups. I have mastermind groups at every stage of practice development, beginner, intermediate, and advanced. We have homework. We have accountability. We have support. We have resources. These groups are amazing. We do a lot of work and a lot of connecting. If that sounds interesting to you, you can check out the details at thetestingpsychologist.com/consulting. You can sign up [00:17:00] for a pre-group phone call and we will chat and figure out if a group could be a good fit for you. Thanks so much.
The information contained in this podcast and on The Testing Psychologist website is intended for informational and educational purposes only. Nothing in this podcast or on the website is intended to be a substitute for professional psychological, psychiatric, or medical advice, diagnosis, or treatment.
Please note that no doctor-patient relationship is formed here, and similarly, no supervisory or consultative relationship is formed between the host or guests of this podcast and listeners of this podcast. [00:18:00] If you need the qualified advice of any mental health practitioner or medical provider, please seek one in your area. Similarly, if you need supervision on clinical matters, please find a supervisor with expertise that fits your needs.