Dr. Jeremy Sharp (00:01)
Hello, testing psychologists. Welcome back. Welcome back to the podcast. Today’s a business episode. It is the first episode in a two-part mini series on scaling and growth. So I’m talking today about whether or not you should grow or you should hold steady. This is a little bit of a live question for me as it has been many times over the years. And I think it’s pretty relevant for a lot of folks out there just based on content from my consulting calls and
mastermind groups. A lot of people are thinking about this. Do grow? Do you hold steady? Do you stay solo? So I’m going to dive in today to talk about this topic and try to figure out or at least give you some bit of a rubric I suppose to work from to decide whether you should grow or just hold steady where you’re at. So if this is a question that you’ve thought about or might be top of mind for you, then stay tuned. Let’s talk about it.
Dr. Jeremy Sharp (01:00)
All right, y’all, we are here and we are talking about growing or holding steady. Like I said, I’ve been through this cycle more than once, many, many times, to be honest, that whole cycle of expanding and right sizing and realizing that growth doesn’t necessarily always equal success, but sometimes it can be really awesome. And honestly, this is, like I said, kind of a live issue for me right now because we are
like many other people having a hard time hiring. And so our wait list has just grown steadily over the last several months. We are booking more than we have capacity for. I’ll talk about capacity in the next episode in the mini series, but we’re just booking further and further out and people are starting to decline to book with us because the wait list is just too long. So I want to talk through the signs that it might be time to scale up and hire and
equally important signs that it might be smarter to stay right where you are. So first section here, signs that it might be time to grow. So as I mentioned just a minute ago, there’s a capacity question here. That is one of the first things that you could look toward to know if it is time to grow. And there are a few layers to determining capacity. I actually did a whole episode just on capacity and using an equation or
math based approach to hiring simply based on do you have the what do you have the capacity for and are you booking more than that capacity. So to bring it to life here in our practice I know that we have the capacity for let’s call it 20 evaluations a week. And since we track all of our intake bookings each week I know that we are booking on average twenty three point one intakes a week for the last several months. And so
In that sense, we have the capacity for 20. We’re booking 23. So that is essentially like every, you know, every week we’re booking an extra three evaluations and that’s just going to stack and stack and stack and make the wait list longer and longer. So if you’re not tracking your well, one, if you don’t have a good sense of your capacity, that’s step one. Figure that out. And then the second component of that is tracking your bookings. So you actually know whether
you’re booking more than you have the capacity for or not. And if we want to go all the way back to the beginning to determining capacity, ⁓ that is really anchored in having a good sense of your schedule and booking a set number of intakes per week rather than just fitting them in haphazardly wherever you might have time. Because if you do that, it’s really hard to track that capacity versus bookings question.
Lots of components there. But like I said, that is a green light. If you are exceeding your capacity consistently over three to six months, I think that’s a good time to consider expanding. OK, so this means that you’ve got a steady flow of referrals. It’s not just a seasonal bump. And presumably, ⁓ you know, this is extending your wait list out further and further over that three to six month period. Another green light, I suppose, even though it’s a bit of a
yellow light in a sense is that your wait list is long enough that it’s affecting client care or the reputation. So people have different thresholds for this in terms of what’s a what’s a reasonable wait list. I hear everything from one to two months up to six to eight months. And then once you get in the range of say 10 to 12 plus months then we are competing in a sense with
most children’s hospitals and other larger entities that are kind of overwhelmed. And so there’s a huge variability here, but this can come directly from your admin team and any other sources that you might be drawing on to know if people are declining to book because the wait list is so long. You can also gauge this based on the ⁓ reputation in the community and if people are reaching out and asking.
hey, why are you booking so far out or we need to get people in sooner, things like that. Another green light, this is maybe one of the most important, is just financially knowing that you have a cushion. So when you hire somebody, it’s not gonna be an immediate ROI on your investment, so to speak. Now there are ways to structure it where you pay that person on a ramp up where they only, they get paid hourly for the first.
several weeks while they build up their caseload. You you do have to pay them for training though, in most cases, especially if you’re doing a W-2 model. So there’s going to be some amount of cash outlay before you get revenue coming in. This also applies if you’re an insurance-based practice and you have a delay between services rendered and payment being completed. So lot of factors to consider here. I like to ballpark three to six months of the expenses and systems cost.
to support a new employee before you hire. you can total up, what’s it going to cost to run this person in the EHR and add them to Google Workspace and their salary, of course, and their hourly or their hourly wage and the training time. You can calculate all of those things and figure out whether you have that little cushion in place because you’re going to.
quote unquote lose money for the first, I don’t know, probably two to three months before their revenue really starts to pick up. So like I said, this is a real time question for me. ⁓ We are seeing clients turn us down because the wait is just too long. So for me, this is a clear indicator that something has to shift. So either we increase our capacity or we risk kind of underserving the community. Now, on the flip side.
We can talk about signs to hold steady in your practice. So growth is not always the answer. I talked a lot about my journey over the last, ⁓ gosh, year and a half at this point, as far as ⁓ right sizing our practice, scaling way back, finding joy in the work, that kind of thing. ⁓ So like I said, this is personal. I’ve thought about it a lot over the last several months. And so growth is not always the answer, despite what you might think.
Here are some red flags that can tell you that it might be better to pause before you grow, even if it feels like you’re turning down business, right? One, you’re just feeling burned out, stretched thin, you’re not finding much joy in the work. These are all pretty relevant factors for me as the director of a pretty large practice about a year and a half ago. So just tuning in for yourself and
getting some sense of how you are functioning emotionally and whether I, I, you know, I come back to this word joy a lot and maybe it’s overplayed. ⁓ but I really like it. I think it really captures not that every single moment in your work should be joyful, but I’m a big fan of the 80 20 rule and, ⁓ you should feel pretty good about 80 % of the time when you go, go into work. And so if you don’t identify with that term burnout or think that’s maybe played out a little bit,
go the other direction and think like, much joy am I experiencing in this work? And if that’s fading, that’s maybe a sign not to continue to hire and grow your practice. Another red flag, I come back to this a lot and talk to people about this a lot in consulting meetings is just those core systems. So if you have any cracks in your SOPs, your policies, your procedures, your software, so this is like, you know, billing, scheduling,
report writing, ⁓ all those things along the client journey. If any of those aspects are still pretty shaky, like if I were to come to you and say, like map out your client journey and tell me exactly who does what when throughout the client journey and what the kind of standard procedure for each step along the way is, if you can’t answer that question or you say something like, well, I have it in my head, but it’s not written down or.
You know, I know how to do it. just tell people along the way. Or if you’re kind of questioning or kind of stumbling over that answer, that’s a pretty good sign. You should not hire. ⁓ Just being honest and again, from personal experience. ⁓ I think of SOPs as and procedures and policies as like a dam, like a really strong dam that is ⁓ kind of holding the water of your practice in place and keeping it, you know, where it’s supposed to be.
And anytime these core systems are shaky, those are like cracks in the dam. And the more people you hire, the more water you put behind the dam, and the more pressure ends up on these cracks. And eventually, things can break and fall apart. So if you have any shakiness in your core systems, that’s certainly a red flag, or at least a pink flag to pay real close attention to and shore up.
Now again, you don’t have to have absolutely everything mapped out. Nothing is perfect and systems are always evolving. But if you don’t have a pretty good sense, again, like 80-20, these policies are in place and you at least know where the gaps are and what you need to fix, I would call that a red flag for sure. All right, last red flag I’m going to talk about here could have a series of episodes dedicated to it. this is the idea.
again, tuning into yourself and recognizing that you are just growing because you feel like you should quote unquote. Now this might be because other people are doing it. It might be because you see these, you know, practice consultants, you know, influencers, so to speak on social media. I don’t actually know if that’s a thing or not, if we have influencers in our space, but you see people on social media who have grown their practice and you know, it looks like it’s working really well.
Other component is, is this your ego that’s pushing you in this direction? So just this idea of kind of tapping into yourself and thinking, what is driving this for me? And this is something, again, I know this like all too well, from probably 2019 to 2022, we grew very rapidly.
partly due to the COVID boom, I think that everybody experienced. ⁓ And for us, it was kind an interesting journey. feel like we had a lot of the practical kind of logistical systems and software and that kind of thing in place, but it was really the leadership team and leadership skills for myself and for others and the supervisory component. And I just don’t think we were ready for that leap. And so, you know,
This is one of those cases again, kind of overlooking a pretty important system and, you know, set of roles in the practice. And so we ended up like really overwhelmed with managing people and policies and, things like that. So now looking back, I mean, I can see that I was really just reacting to the demand and letting, I think my ego sort of drive the bus.
you know, growth felt like the right thing to do because it equaled success, quote unquote, and accomplishments and admiration. And, you know, it was fuel for the podcast even to, kind of say, you know, managing this larger practice. And there was a lot wrapped up in that for me, but underneath it all, uh, I think it was all honestly just like scarcity and, know, wanting more and more and more and thinking that I had to hire more to make more money. And, you know, that combination just led to.
decisions that weren’t sustainable. So I guess taking all of that together, basically doing an ego check and getting a sense of why the why. Why do you want to grow?
The last thing I want to talk about is just continuing with that theme that’s kind of like a mindset check for you. So I think mindset is huge in this whole process. And it’s this question of like, are you kind of chasing growth from a place of abundance because you truly, like truly, when you really sit down with yourself, you truly want more impact or more freedom or more revenue, or are you acting from
you know, again, this place of scarcity or fear that if you don’t grow, then you’re going to lose these referral sources or business is going to dry up or you’re going to fall behind other practices or, or something like that. So, you know, over the years I’ve, I’ve made both kinds of decisions and I will say the scarcity driven ones usually ⁓ cost more both financially and emotionally. So this is just the, you know,
gentle reminder, I suppose, from having a little bit of hindsight in this process to say, hey, do a mindset check and just kind of see where you’re at and what’s really driving you here. So you all know me. I like to be pretty practical whenever possible. And so I’m going to end with a little practical reflection. So if you are driving, if you are working out, if you’re walking, if you’re out and about, maybe this is, you you take out your notes app and
Talk into it or something like that if you’re sitting around you can actually write this down, but here’s the the prompt I would love for you to reflect on this question and you know journal quote-unquote or however you might want to record it So the question is if your practice stayed exactly the same size for the next 12 months How would that feel? All right, if your practice stayed exactly the same size for the next 12 months, how would that feel? And for me
Personally, I did this to prepare for the podcast, but I found that the answer is mixed, to be honest. So from a team and personnel standpoint, I would feel totally OK. I think we have great cohesion right now, and ⁓ the team is working really well, and we’re kind of clicking along. But on the flip side, I would feel pretty bad if we continued to just look further and further out, increasing our wait time and
kind of doing a disservice to our community. So in this particular season, this is where I’m looking toward a little more growth to, you know, to hire one or two other folks to come alleviate our wait list a bit and hopefully join our team and become a fantastic team member. So those are my reasons for pushing toward growth in this season. And of course, you know, checking in.
Do I have the capacity for this? How will this affect the team? It’s good to come from more of a grounded place, I think, in making that decision. The second component of this, if you want to, you can do a quick financial audit. Do you make sure you have those operating expenses in place if you were to hire? And if not, growing will probably just add more stress than it solves, especially in the short term. So that’s it for…
this first part of the scaling and growth series. Next time, we’re going to talk about the how. OK, so kind of hiring versus optimizing. digging in a little bit further, if you have decided you want to hire, I’m actually going to question that just a bit and try to figure out if you really need to hire or if there is some optimizing that you could do for your current team. And you know, that’s a better choice to go that way. So if you’re right in the middle of these decisions, ⁓
You know, I’m always happy to chat with folks via strategy session. There are more mastermind cohorts starting in January, but if you want to jump on a call, happy to talk this through. You can go to the testingpsychologist.com slash consulting and thank you as always for being here.
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