To be or not to be—in private practice, that is. I often hear this question from colleagues who are contemplating that path. Although most are excited by the possibility of owning a practice, all grapple with many "what-ifs." Making the transition includes daunting changes—loss of a guaranteed paycheck and benefits, to name two. But the challenge of owning your own practice can be worthwhile and rewarding.
I've been a private practitioner several times; each experience was new and different. I began my first, part-time practice after earning my CCC. In private practice, I served an adult population; at the same time, I had a full-time clinical position working with preschool children with articulation and language issues. I was single and had time to devote to marketing and growing the private practice.
After several years, I relocated for the full-time position. In addition, with marriage and children, my priorities changed. I was a full-time mom, full-time speech-language pathologist during the day, and a part-time adjunct faculty member in the evening.
Life changed even more when I became a single mother, a phase of life that made a guaranteed paycheck imperative. Yet private practice still intrigued me. I opened my second private practice at a new location to work with management-bound employees who sought accent reduction. When I relocated closer to extended family, I put the practice on hold.
After several years the private practice idea surfaced again. I was working more than 40 hours a week in addition to commuting 90 minutes roundtrip daily. My children brought up the question: why didn't I go into business for myself? It didn't take long to consider that maybe it was time for a change.
My new practice was a partnership with a colleague. We mapped strategies for nearly a year, writing a business plan, establishing a line of credit, and determining contracts to pursue. We continued our full-time positions at first and worked in the practice part-time, gradually moving over to our new business. The first year we turned a profit and put together a small package of benefits. However, each of us eventually moved on and we dissolved the partnership. I made the transition from partnership to a full-time solo practice, relocated my office, and continued with contracts already in place.
Through these experiences I learned the most important questions to consider before moving into private practice.
Learn the Business Basics
The ASHA bookstore offers resources such as Guide to Successful Private Practice in Speech-Language Pathology and Business Matters: A Guide for Speech-Language Pathologists, which offer advice on business, forms, and sample letters.
The American Academy of Private Practice in Speech Pathology and Audiology (AAPPSPA) supports beginning practitioners and also is beneficial for SLPs who have had their business for sometime. An active listserv allows members to post questions about treatment practices, business questions, and other practice-related issues. AAPPSPA offers sample forms, columns written by business and legal consultants, and articles by members who share expertise. The organization sponsors an annual one-day clinical institute and two-day business conference. Several of its members have contributed to ASHA's Guide to Successful Private Practice in Speech-Language Pathology, and others have presented sessions at the ASHA Convention on opening a practice.
If your interest runs more toward corporate speech-language pathology, check out the Corporate Speech Pathology Network (CORSPAN), a nonprofit organization for corporate SLPs. The organization offers educational forums, mentoring, and advice on its listserv. A number of SLPs in private practice belong to both CORSPAN and AAPPSPA.
Katie Schwartz outlines business options for SLPs in Talking on the Job: The World of Corporate Speech Pathology. She also wrote Alternative Career Choices for SLPs.
ASHA's annual Business Institute is another opportunity for expanding business knowledge and networking with other private-practice owners. Scheduled in conjunction with the Health Care Conference, the Business Institute offers practical guidance to clinicians at all levels of experience in the private sector.
Choose a Business Structure
Many business structures are available—sole proprietorships, limited liability companies, C corporations, S corporations, and more. Consulting with an attorney is essential, as it can prevent costly mistakes. An attorney will suggest the best business structure for your situation, research your choice of business name to ensure it is available, and make sure you are following state rules and regulations.
The laws determining whether a person is an employee or a private contractor are very complex. The Employment Law Handbook includes a chapter on the topic. An attorney can help you understand the differences. Some colleagues have staffed their practices with independent contractors but later found that legally the SLPs were considered employees. Employee status makes a practice responsible for paying benefits, as well as back taxes, fines, and penalties for failing to make these payments. You may structure reimbursement for employees as a per-visit amount rather than a salary. The more an employee works the greater the reimbursement. Legal counsel can provide additional help in structuring a reimbursement or salary schedule.
An attorney can also help you structure contracts and non-compete clauses and consideration and can help determine benefits if you hire employees. An employee handbook is advisable and discipline policies should be identified.
If you choose a partnership, include terms for dissolving the business. Although the partnership may work well at first, time can alter dynamics. An attorney may also specify details of sale of the business. What happens if you choose to retire? All of these issues can be addressed in the partnership agreement.
Private practice involves more than seeing clients. Much non-reimbursable activity happens behind the scenes: billing, developing contracts, and dealing with insurance. Each partner may have different strengths—some enjoy networking and marketing, others are better at office management, and some prefer only to see clients. Use one another's strengths, but remember that office management is essential, and the partner who takes on this responsibility will not be able to carry as large a caseload.
If the situation arises, be prepared to terminate the partnership and stick with an agreed-on plan. It is inadvisable to talk a partner out of a decision to dissolve the practice. Think of it as a learning experience. Many SLPs are very happy in their partnerships—and just as many have chosen to terminate a partnership and become solo practitioners.
Set Up an Accounting System
A certified public accountant can help set up books for the business, structure a chart of accounts, and get you started with posting. A CPA will identify tax-deductible expenses; if you want help filing taxes, retain a CPA for work throughout the year rather than for initial business set-up only. You can opt for a tax ID—employer identification number—or use your Social Security number. If you choose to take out a line of credit, it can be tied to your business checking for fund transfers as needed.
A CPA likely will insist on keeping business and personal funds separate. A business checking account and credit card are essential. Accurate records of income and expenses will decrease your tax preparation time.
Develop a Business Plan
Before transitioning to full-time private practice, consider developing a business plan; not only is it a good planning tool, but banks may require it before offering a line of credit. Numerous Web sites can walk you through the process of writing your business plan.
Another resource for business planning is a local college or university. Business students looking for experience would welcome the opportunity to assist—they may be able to earn internship credits. The local chamber of commerce also can provide information about community members who have business planning expertise.
Establish a Line of Credit
Working with a bank to establish a business line of credit will help any financial crunch when contracts fail to pay on time. It may also help to obtain a credit rating. Think of the credit line as an emergency fund and don't touch it unless it is absolutely necessary for the business.
Make the Insurance Decision
The area you live in will help determine whether or not you want to accept insurance or private-pay only. My practice is mostly insurance-based, as my clients could not afford treatment without insurance.
If you elect to accept insurance, contact the providers in your area for information on joining their plans. Applications may be lengthy and require extensive documentation. Count on 60–90 days for application processing. Once approved, learn how to file claims—some companies prefer to receive them electronically.
If you choose private pay, investigate credit/debit payments. A bank's business program may be cost-effective for machine rental or ownership. But remember, you pay a monthly fee for equipment rental, whether or not you use it. For private-pay clients consider using ASHA's superbill [PDF], which allows SLPs to document treatment and applicable codes; clients can submit the form to insurance companies for credit toward a deductible or for reimbursement.
Build a Client Base
Survey the area in which you plan to open the practice. What needs aren't being served? What unique services do you offer that others don't? Possibilities include early intervention, home health agencies, long-term care facilities, and schools.
Who runs the early intervention programs in your area? You can contract directly as a provider or as a subcontractor for an agency that obtains referrals from the county mental health office. These contracts include pros and cons—you must provide services in the client's home for birth-to-3 programs, and the more distance you travel, the fewer clients you can see daily. Mileage may not be reimbursed, and if the client isn't home or refuses the session, no payment will be received. It is, however, possible to establish a substantial caseload through early intervention.
Home health agencies provide speech-language treatment. Services are provided in clients' homes and travel expenses may not be reimbursed. For home care agencies and early intervention programs, scheduling occurs at your convenience and you don't need a traditional office.
Long-term care facilities often need coverage for vacations, holidays, maternity leaves, and temporarily large caseloads. Some companies may pay mileage and/or travel time, depending on the distance you travel. Hospitals also may need assistance for weekends, holidays, and leaves.
Schools may need help with their caseloads, depending on current staffing levels. School systems may arrange part-time or full-time contracts.
Advertise Your Services
Put together a great-looking business card—big-box office supply companies are a good source. Many Internet companies offer packages of coordinated letterhead, envelopes, brochures, postcards, and sticky notes. ASHA offers letterhead, envelopes, and business cards through My Market.
Check the Internet for companies that offer inexpensive personalized pens and pencils as well as other items for giveaways. Joining the local chamber of commerce allows access to membership mailings, which will include your business fliers for a small fee. The chamber sponsors monthly after-work events at local businesses, a great way to network and circulate your business cards to members.
Review the local newspaper's community news sections for meetings of support groups and centers that offer programs for older adults. Senior centers are always looking for speakers. Day care facilities may be interested in speakers for parent meetings or speech/language screenings. Many towns have business associations and networking groups, and most include member presentations at meetings.
Make presentations to pediatricians, family physicians, orthodontists, psychologists, or anyone who would be a good referral source. Provide giveaways and information packets and be sure to contact the office managers.
Develop a professional-looking Web site, and ask clients for testimonial letters that can be accessed online. A satisfied parent is a wonderful referral source. Yellow Pages ads also can bring business.
Set Up Your Office Space
Many full-time private practitioners begin small, relying on word-of-mouth for referrals. Some work from home while others rent office space. If you plan to see clients in your home, check the deed—some developments do not permit businesses to operate from home. But what if only a few clients come to you and you see most in their homes? As tempting as it would be to see clients in your home, once neighbors object, you could face a lawsuit.
Think about phone contact information. Some colleagues with small practices use a cell phone as a business number. You might want to consider a separate number in your home for business calls and a fax.
Insure Against Malpractice
It is important to maintain malpractice insurance. Check with your contracting agencies—they may require a listing on the insurance policy, which will cost an additional fee. This documentation requires annual updating. If you rent office space, maintain insurance to cover property and any liability for clients in case of injury.
Grow Your Business
Once you've identified practice goals, you can move forward. As the referrals come in, a "good" problem could arise—too many clients and not enough time. Options are a waiting list or possible expansion. Before taking on extra expenses and headaches for expansion, consult with an attorney. Think seriously about where you want the practice to go. Some colleagues expanded a business and then opted for downsizing, finding they were happier as solo practitioners. One thing to keep in mind—bigger may not always be better.
This issue contains several business-related articles. Any ASHA member considering entry into private practice should conduct due diligence on all aspects of business practice.