How Therapists Can Pay Themselves $100,000 in Private Practice
A topic that comes up a lot in my coaching sessions is how therapists can hit the elusive six-figure mark. As we’re about to enter the new year, I’d like to talk about how to structure your finances to do just that. Owning your own private practice comes with many benefits–one of them being the freedom to set your own schedule and change your rates. In this guide, I’m going to walk you through how to adjust those two factors so you can pay yourself $100,000 a year after taxes in 2024.
But first, one quick caveat. As someone who both owns my own practice and has worked with many therapists to grow theirs, I know we can put a lot of pressure on ourselves to hit a certain figure. Sometimes this stems from wanting our families or friends to take us (and our practice) seriously, and sometimes it stems from wanting to feel like we’re enough–like we’ve “made it.” While I am all for scaling your business and having an abundance mindset, you need to make sure your intentions and expectations are right. Meeting your six-figure goal will be a great accomplishment, but it can come with even more responsibilities and pressures. You may not feel “good enough” at the end of the day, and that’s okay. We are all works in progress! My advice is to strive for $100,000 while giving yourself grace to be imperfect, both during your daily rhythm and if things don’t go exactly as planned.
Okay, on to my guide! I’d recommend taking about an hour of focused time to start looking at these figures so as not to get overwhelmed. You can always come back to continue to finesse and plan.
Step One: Plan to work 46 weeks a year.
Your primary objective at the end of this exercise is to determine your session schedule and the corresponding rates. To determine those factors, you need to know how many weeks you are working a year. I recommend planning to work approximately 46 weeks a year, which will account for sick days, holidays, and unexpected events. If you end up working another week or so more than that–great. But to be realistic about your time and avoid burnout, plan for 46 weeks.
Step Two: Take a look at your current monthly income.
How much are you making a month right now, and how much is that fluctuating? To meet the $100,000 annual mark, you’ll need to pay yourself approximately $8,333 per month. I recommend aiming for a ballpark figure of $12,000 for monthly revenue, though, because you’ll have other expenses and taxes to pay.
Step Three: Make a plan for $12,000 a month (or $3,200 a week).
Next, you need to map out a plan to make 12K a month by working 46 weeks a year. (If you have any additional revenue streams, focus just on your therapy session income for now. You can adjust your plan accordingly later–or increase your annual figure beyond 100K once you see what is doable or not doable.)
Ask yourself these three questions:
How much would I charge per session?
How many sessions would I need?
What would my schedule look like?
Step Four: Calculate your expenses.
Next, calculate what you will deduct on a monthly basis, taking your various business expenses and taxes into account. I would also recommend starting an emergency savings fund for your business, which is a third factor to account for. By calculating your expenses and deducting them from $12,000, you’ll be able to ensure you’re on the right track to paying yourself $8,333 a month. If your expenses are too high, you’ll need to restructure your plan from Step Three so you can still pay yourself an average of $8,333 a month.
Step Five: Adjust your plan for sustainability.
If your new session schedule for making 100K sounds totally overwhelming, my advice is to adjust your rates instead of compromising your well-being. Many therapists balk at the idea of raising their rates, but remember, the ability to set your rates is one of the unique advantages of having a private practice! My advice is to adjust your schedule reasonably and raise your rates strategically this year. You can explore other revenue streams in the future, but if you just have one revenue stream (via one-on-one sessions) right now, this is going to be your best and safest starting point.
While my guide may not be an exact science, it can serve as the foundation for a financially healthy 2024. I have full faith that with a strategic and optimistic plan, you can grow your finances in the next year, giving yourself the ability to take care of yourself and your family. Remember, you don’t have to be a martyr to make a difference as a mental health professional. Therapists deserve to build a life they love, too–and that includes you.
Want to put your headphones in and hear me talking you through these steps? Check out Episode 91 of my podcast The Entrepreneurial Therapist.
The Entrepreneurial Therapist is the #1 podcast for ambitious female therapists and can be found on all the main streaming platforms.
Hi- I’m Danielle Swimm,
a Business Coach for Therapists
I’ve helped hundreds of ambitious therapists like yourself start, grow and scale their private practice. I love being a therapist, but hate the rhetoric that you need to sacrifice your energy and income to help your community. Let’s build your dream practice that allows you to make six figures and live the life you’ve always dreamed of.
