Private Practice Success Newsletter

March 2007, by Lynn Grodzki, LCSW, MCC (Master Certified Coach)
www.privatepracticesuccess.com

Return On Investment

The coaches, therapists, consultants, and healers that I know all work hard. They are devoted to their craft, and seem to continually train and learn to improve their skills. They do their best to administer and manage their small businesses. And that includes taking time to build their practices by outreach: marketing, networking, speaking, writing, direct mail, or internet and print advertising.

No wonder then, that they ask the following questions:

How do I know if my efforts are worth the trouble?
When will my marketing pay off?
Am I doing enough, too much (or too little) to stay viable?

If these questions seem familiar, than you are thinking about how to measure your Return On Investment (ROI). This is a good thing, and shows that you are being entrepreneurial. This month, let's explore some ways to measure results.

We all have to decide how we are going to fail.. by not going far enough or by going too far. (Sumner Redstone)

When you are the owner and operator of a small service-oriented business, measuring ROI is different from the traditional method of looking only at your profit line. Here’s one big reason why: making an investment in your practice of money, energy, time, and/or resources -- and then seeing its direct return in terms of more income, clients, opportunities or reputation can be hard to chart directly. In a service-oriented practice, results may require months or years to materialize. It doesn’t mean your efforts aren’t working: it means that your goals require more time than you know.

But you still need ways to evaluate your expense and efforts, to know what is useful in achieving your goals and what is not. Here are useful markers for ROI that may make more sense when trying to determine the right balance between effort and effect, in a therapy, healing, consulting, or coaching practice.

Security is mostly a superstition…Life is either a daring adventure, or nothing. (Helen Keller)

First, try thinking about your business decisions and efforts in terms of risk versus reward. If your small business does not incur enough risk, it is probably not going to grow, develop, or expand. Business risk is a combination of your investment (money, time, energy, resources) plus your tolerance of possible loss of that investment.

Ask yourself: Are you taking enough risk this year, in terms of how you invest in your business? What are the risks inherent in your investment? What is the right balance for you now, so that you and your business stay healthy and viable?

My first six years in the business were hopeless. There are a lot of times when you sit and you say "Why am I doing this? I'll never make it. It's just not going to happen. I should go out and get a real job, and try to survive." (George Lucas)

As you evaluate your efforts and your results to build your business, sort out your short-term aims from the long-term goals. For example, if your goal is more clients now, and you judge all your marketing and advertising investment against the flow of clients generated this month, you will probably be disappointed and even worse, may stop your investment too soon.

Marketing, networking, and advertising are long-term investments. Industry standards say that it takes a person a minimum of six times to see an ad, before contacting the advertiser. Networking usually requires four to six contacts before producing referrals. Direct mail yields about a 1% success rate. These strategies are important and need to be ongoing, but you have to give them enough time (usually years) to really produce. Track your results, but be realistic about the timeline.

Successful business owners tend to be as interested in the top line (dramatic growth from new markets and innovation) as the bottom line (the accounting fiction of profits). If you are expanding, staying intrigued and passionate about your work, that is an investment in your future profits.

This month, define your annual goals. Decide what measurement you will use to chart them (risk vs rewards, for example). Determine the scope (short term or long term). Keep careful track at 3 month intervals, and by the end of 2007, you will be better able to evaluate your ROI and know what is worthwhile and what is not.

Upcoming Presentations

March 16, 2007: Washington, DC
"From Insight to Action"
(Lynn's workshop helps therapists and other professionals integrate a coaching approach to elicit motivation and action.)
Psychotherapy Networker Conference

March 17, 2007: Washington, DC
"The Future of Private Practice"
(Lynn's workshop gives a big-picture look into the "2007 State of the Practice," and suggests trends, markets, and strategies that can define a successful private practice during the next decade.)
Psychotherapy Networker Conference
To register contact: www.psychotherapynetworker.com

June 1, 2007: Philadelphia, PA
"The Evolving Private Practice"
Hyatt at Penns Landing sponsored by the Marworth Treatment Center
Contact: David Reynolds: dwreynolds@geisinger.edu

September 2007: Australia!
Workshops in Sydney, Melbourne, Brisbane, and Perth.
"Success in Private Practice: How to love what you do and be highly profitable too!"
For information and dates, go to: http://kassanevents.com.au/training1.html

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Books by Lynn Grodzki, published by WW Norton. To order, click on each book.

	The Business and Practice of Coaching By Lynn Grodzki and Wendy Allen (2005) Reviewed by author Richard Leider as "Nothing less than a radical rethinking of the essentials of building a coaching practice. A must read for all coaches, master and novice alike."
	Building Your Ideal Private Practice By Lynn Grodzki (2000) The best-selling guide to what you need to do and who you need to be in order to have a highly profitable, personally satisfying private practice. Often called the "private practice bible" this book has become a resource for tens of thousands of your colleagues.
	The New Private Practice:Therapist-Coaches Share Stories, Strategies and Advice Edited by Lynn Grodzki (2002) A groundbreaking look at the profession of coaching through the eyes of 16 successful therapist-coaches who tell you how to become a coach, what to charge, and show you how they coach their clients.
	12 Months to Your Ideal Private Practice: A Workbook By Lynn Grodzki (2003) This planned, motivational workbook will help you build the practice you desire. The workbook incorporates fresh ideas, new exercises, further skill sets and much more to give you a direct experience of being carefully coached by Lynn, month-by-month, for a full year.

More next time,

lynn@privatepracticesuccess.com
See the website for additional articles, information about individual coaching, and upcoming classes.