by Corporate Relations/Business Strategy and Communications Staff
Most practitioners were not trained in core principles that apply to what they must do daily — manage and build a business. And many psychologists find that the business of practice is growing increasingly complicated.
Practicing psychologists interact regularly with a variety of business and financial people. When you deal with accountants, managed care representatives, hospital administrators or your practice consultants, having a firm grasp of business principles and terminology facilitates your interactions.
"The health care system's growing complexity increases the need for practitioners to be familiar with business concepts," says David Ballard, PsyD, MBA, assistant executive director for corporate relations and business strategy for the APA Practice Organization. "Psychologists functioning in today’s complex environment must build their knowledge base and learn how to put business concepts into practice."
Good Practice asked two APA members about ways for psychologists to develop a business mindset and apply business principles to psychology practice.
A first step is to "do your homework," according to Brian Sullivan, PsyD, owner of Lifeworks, LLC, in Mount Pleasant, SC, an interdisciplinary suite of health care professionals and financial advisers who collaborate to provide client services. "Before you step into private practice, or make a move to grow [your practice] in a new direction, ask yourself, 'What do I know about what I’m going to do?'...Many of us know too little about how to create, position, manage and grow a business."
To help psychologists build their business knowledge base, Alan Graham, PhD, owner of ACP Consultants, LTD in Park Ridge, IL, and a member of the APA Business of Practice Network** steering committee, suggests reading business books and periodicals, as well as material available from the APA Practice Organization.
Continuing education can help fill the gaps created by lack of training in business matters in many psychology graduate schools. Practitioners find they can reap additional benefits beyond expanding their knowledge of business. "Taking business courses puts you in touch with others who are learning about business," says Dr. Graham. "It provides an opportunity to build your network of business persons."
These two psychologists have found abundant opportunities to learn by making connections with others who are also managing a business. "It’s primarily a matter of 'getting out of your office,'" according to Dr. Sullivan. "Take long lunches with people you know, but perhaps more importantly, take longer lunches with people you don't know. Get to know people who do things you don't, who know things you don't." Trading ideas freely can help you learn to think bigger, he adds.
Dr. Graham belongs to a group whose business-owner members meet regularly over breakfast. This affiliation enables him to talk to people outside of psychology, to understand what’s on their mind and important to managing their business.
One central tenet of business is that human and other resources should be put to their most productive use. Along these lines, Dr. Sullivan encourages colleagues to consider the wisdom of outsourcing. "We're well-schooled in recognizing when we might be at risk for operating outside the boundaries of our competence within clinical practice. But we're not necessarily good at recognizing our limits when it comes to things like filing insurance claims, marketing and brand development and creating a viable financial plan."
Dr. Sullivan uses information technology specialists to illustrate his point. Some clinicians may be 'clueless,' he says, about how to set up and maintain an efficient technology infrastructure — even if that infrastructure consists of only one computer and a printer. There are many ways to optimize technological performance, according to Sullivan, and "we should not be afraid to look to others for guidance, assistance, preventive maintenance and plain old elbow grease."
Both Drs. Sullivan and Graham recommend yet another common business strategy: charting your course with a business plan. "Psychologists need a 'road map' for achieving their mission," says Dr. Graham. A sound business plan helps you set goals, and it guides decision making about how to achieve these goals.
Dr. Sullivan observes that a business plan is a 'living document' that you should review and update regularly; it needs to evolve along with your professional vision.
Several additional pointers from these psychologists for putting business into practice include:
- Hire solid employees, keep them happy and learn from them. Reward good performance: Show good employees you value them with praise and bonuses.
- Think about "return on investment," not simply the cost of doing business. When thinking about hiring an administrative assistant to take care of matters such as insurance claims filing or scheduling, for example, don’t focus solely on the cost of employing the new assistant. You also need to factor in the additional hours you would be freed up to produce revenue for your practice once you no longer need to handle such tasks yourself.
- Be open to new opportunities. Increasingly, psychologists are finding innovative ways to apply their expertise in human behavior outside of the traditional mental health realm. For some psychologists, such diversification helps to create multiple streams of revenue and improve their practice finances.
** The APA’s Business of Practice Network works to strategically position psychology in a leadership role within the marketplace by developing strong collaborative relationships with the business and employer communities and educating them about the roles and value of psychology in the workplace.