Coronovirus (Covid19) Flu, Profit Margins, and Survival

This sign, I think, depicts what I am saying . . . . Closed—but thanks to good practices—not gone. Photo by Tim Mossholder on Unsplash

Coronavirus (Covid19)

So the world is facing a new pandemic. It’s all over the news and everyone I know is assessing the risks to the people they love that may be particularly vulnerable. Universities are closing. Healthcare providers are taking employee’s temperatures before allowing them into work. Sports events are taking place with few or no fans in attendance. Some are avoiding going to restaurants, changing vacation plans, or working from home.

Globally, I recently read that in Italy all businesses are shut down with the exception of grocery stores and pharmacies. Imaging that! In my local context, there is a lot of fear, many people working to try and contain and lower the risk, and speculation about the actual size of the threat (here I speak in global terms not individual outcomes which obviously can be catastrophic) which remains unknown—and possible unknowable—as I write..

Local . . . and Global . . . Impact

Even in my small arena and in the smallest businesses that I work with, consideration of the risks and substantial departures from normal operations are taking place in order to cope with this emerging threat. People are asking a lot of questions they did not have to consider only a few weeks ago. What do you do if customers will no longer come to your “brick and mortar” for services? What actions do we need to take to protect employees? What do we do when our sales stop for a time . . . due to the changed behaviors of customers due to this threat?

A Terrible Event . . . and a Business Lesson

However, while trying not to minimize the terribleness of this pandemic, this very public crisis demonstrates the very real need for business to plan for such events. You can’t, for example, provide free services (vaccines for example) if your employees quit because you can’t pay them. Businesses who regularly create a “rainy day fund”—by collecting a profit—are able to continue to provide services even if their revenue stops temporarily. Businesses that don’t do this have to find someone else’s cash (banks, private loans, grants) to survive.

The grim reality—the coronavirus and it’s threat to businesses—frankly reminded me of conversations I regularly had with graduate students in the behavioral health programs. I hope those conversations helped them to be prepared to ride out the turbulence of a crisis like we are facing now.

Business Survival and Profit

Talking to those students about the “business side” of being a health care provider . . . and the role of accounting for the three traditional components of business—operating costs, labor expenses and a profit margin in establishing a fee structure . . . I would ask students, “What exactly is profit?" I could often see these good-hearted students squirm as they struggled with their answer. Every semester these students—most of whom had never had a business class in their academic careers—would answer with some variation of the following . . . “It is adding an amount to your fee because you want to make more money.” Or . . . “It’s deciding the market will pay you more so you raise your fees to make more money.” No and No. The first definition, as students described it, should be labelled “greed.” The second, some form of “price fixing or gouging.”* Adding a profit margin to your fee is neither of these . . . and the present crisis illustrates why.

Businesses who only cover their expenses (operating costs and labor) have no insurance policy for a severe crisis like the coronavirus. Thus, when a crisis hits, these businesses are dependent on an outside entity to rescue them . . . a government bailout, bank loan, or private funds.**

In my own private practice, I have had to weather periods of no cash flow. Most notably when the Affordable Care Act was started. Insurance companies were unable to tell us what copays to collect and were not paying in a timely way. Everyone in my practice survived on the savings (profit) that they had collected and we were able to stay open for the three months we had no revenue coming in. Others, albeit lesser disruptions, include changes in the insurance industry, transitions to electronic medical records, billing department personnel changes, etc.

I genuinely worry about some of my colleagues in health care in this current crisis. During the Affordable Care Act transition, I heard colleagues talking about drawing on their own personal savings, getting short term loans to float their practice, drawing on personal lines of credit . . . or other measures to keep operating.

In the present crisis some, especially those who have believed that charging a profit margin is equivalent to being greedy instead of a means to insure agains risks like the coronavirus, may find themselves in a similar crisis. What will they do if insurance payments cease for 30 to 90 days? If their client load drops significantly for a time?

Maybe they can draw on outside support to survive. Perhaps they’ll get a loan. Maybe the government bailout will be accessible to small business owners. Maybe they will draw on their own personal assets to float the business for a while. I assume most will “get by” somehow. Hopefully not, but it’s likely a few may simply close their practice.

Still, as the old business adage goes, “you can’t operate even one day without cash” so it is my sincere wish that my students and the professionals I have trained and coached have planned ahead . . . building profit margins into their fees, retaining these earnings in their business, and as a result have less fear and angst about the current threat to their livelihood. After all, none of us need more to worry about at a time like this.

Here’s wishing you all the best!

Resources:

Learn more with Bryan’s free eBook: Private Practice through Contracting.

Got a question? Ask Bryan.

* I am not arguing that no one sets fees in this manner, they most certainly do. In fact, I have no doubt that some have become very wealthy in this manner, it is not, however, in my view an ethical way to establish fees.

**Yes, a business can plan ahead by establishing a “line of credit” to borrow against in a time of crisis but you are driving up your operating costs by not planning ahead and saving money in your business to weather a crisis where there is no cash coming in.

Disney or Pixar? Believing and Investing in You . . . (r) Career

Photo by Ross Findon on Unsplash

Chasing Past Success . . . Leads to Failure

Do you want to be Disney or Pixar? (Yes, I know that Pixar is, now, once again, Disney. But hang on and you’ll I think you’ll see my point.) What am I implying in this comparison? Simply, that everyone makes a choice to either let the “industry” or the “dream” determine their professional path. There was a time where my view of these two companies was like this:

Disney was, in my view, playing it safe. They tightly controlled access to their products (still do), not allowing them to be readily available, and using “new” releases of their content to resell their most successful products, or they remake the popular products (over and over) to create new revenues—and for a time, created little new and interesting products. From a business viewpoint, leveraging their past successes was working—to some degree. But they seemed unaware of the losses they were experiencing through this operational stagnation—the “opportunity costs” of not growing and not capturing new markets. They were stagnant.These costs were exposed when employees left and created Pixar.

Pixar, comprised of employees who left Disney, on the other hand, believed in telling a great new story. They believed that creating a strong story and allowing their team the creative freedom to design the telling of that story would be compelling to their customers. The leaders wanted to create a more dynamic, supportive, team that would engage in finding new stories worth telling. They left Disney because of the constraints on their vision or creating a new process and new products. They found a new niche that exploded with customers for their products—and Disney, eventually, recognizing their missed opportunity—eventual bought them and brought them back into their company.

Fear. The longer I have been a professional, the more I recognize fear as being a primary roadblock for people in many areas of life. From the “narcissist” who will not admit to making mistakes, doesn’t apologize, and who dominates conversations to avoid feeling vulnerable or out of control to the “codependent” who will not stand up for their own best interests, accommodates to everyone else’s wishes and who may enable destructive behavior around them—fear is often one of the causal factors of this behavior.

I have no doubt that there was fear at Disney. What if we go to the expense of creating a new product and it fails? Better to “play it safe” with what we know works. Too often, leaders cling to the successes of the past and forget that the successes came from forging new paths. Disney, once the vanguard of something new, let the past—their own history within their industry—determine their orientation for the future. In a sense, the industry standard was now defining Disney. Not Pixar. Pixar wanted to reshape the industry. They wanted to return to a time when new stories, well told, and creative presentation would become the standard.

Fear and Change

In this blog, we’ve written about fear regularly, we’ve focused on the problems of management by fear. We’ve talked about the lies that people tell themselves to protect themselves and avoid unwanted fears, We’ve detailed the problems expressed by ego, trust, mistakes, or control. Finally, we talked about fear in transitions in family businesses. Fear is a powerful enemy. For many it promotes the prey mentality . . . “don’t move and maybe you’ll survive” . . . for other’s it promotes action . . . “keep moving or you might become lunch.” The best approach to fear is to recognize it but not let it “drive the bus.” Analyzing when it is an indicator of real threats or when it is just a conditioned response.

Professionals are no different than the leadership at Disney. The average professional is content to let the profession shape their practice. Right now, the losses due to “opportunity costs” are not particularly painful. Professionals can make a good living. Many over the course of their career dream about changes they would like to see in their professional practices (like no weekend or evening work, less paperwork, providingnmore educational groups, going entirely private pay, or offering a new type of service) but lack an understanding of the steps to reach their goals, do not have the proper supports, or are fearful of the perceived risks.

At one time in my career I joined a group of professionals whose goal was to support the work of private practitioners. I didn’t attend long. Why? Because, in my estimation, the group primarily focused on the fears the group members had of making a transition into private pay. I heard a lot of support for members but few “solutions” or guidance on how to get to a private pay model. Frankly, if I would have lived in that community it might have been worth while to continue but I decided the value wa not worth a commitment of half a day to attend (travel, meeting, and return trip). Hopefully, those who stayed got something they needed out of it.

Most professionals, in my experience, “go it alone” or with the support of a small set of colleagues, the support of a practice they join, or a mentor. They are limited by the experience, vision, and yes, even fears, of their circle of supporters. Many would benefit from getting outside their parochial environs and find support from coaches that have successfully traversed the path they want to take. Few will.

Approaching . . . cautiously . . . Changes to your practice

Taking risks by investing in one’s own career is often taken tentatively, if at all, by most professionals. They fearfully stop working weekends or cut back on their evenings. They drop an insurance provider with poor fees. The average practicianer will also, of course, attend trainings that they can see will directly help them in their career—a new technique (EMDR training), method of service delivery (Neurofeedback), or product (coaching)— but exploring the cutting edge of practice, new modalities of practice and the changing landscape of engaging professional services are paths chosen rarely, and only by the few.

So, as an example, the enterprising few have created on-line venues for providing counseling and coaching on-line (see, for example, PSYPACT). An increasing number fo professionals over time follow these explorers by joining and providing the services once the framework has been created. More, perhaps most, may take a “watch and wait” stance to see how new approaches “shake out” in the industry. Still others, wary of the ethical challenges, professional licensing limitations, and potential legal risks will not—unless compelled—engage in any way this new frontier of practice and may even question the motives, ethics, and professionalism of those who do. Yet, at it’s very core, it is a change, either good or bad, that is happening and that is unlikely to be stopped, in my opinion, unless it is addressed through regulation on a national level.

No, a professional should never practice in a way they deem to be unethical, of dubious benefit to clients, or out of their scope of expertise. But . . . that doesn’t mean that professionals have to limit themselves to the constraints of the past either. The profession has always changed and grown. From it’s roots in neurology, to the application of psychological principles in industry, to the application to artificial intelligence, the field will continue to evolve. Professional vision and the opportunities they cease will lead the movement. Will you be in your career? Part of the vanguard, scouting out new territory? Perhaps, preferring the safety of journeying among peers positioning yourself firmly in the group? Or, perhaps, the trailing the pack and holding on to the past territory?

This week, I got an email from a professional who is taking part in our Leading Edge Coaching**. We had to delay our meeting but she noted that she has a new contract and couldn’t wait to tell me about it. Good for her! She is courageously moving toward her preferred future and finding that it is possible.

**Leading Edge Coaching (LEC) is our process to provide specially-tailored coaching to a limited number of professionals who want to add contracting and consulting to their “toolbox” of services. Coaching is a monthly one-on-one with Bryan G. Miller, Ph.D.—with most of the work carried out between coaching sessions to keep the cost minimal. The goal of LEC is to help professionals to get their first contract within 6-9 months or expand their current contracts. Space is limited to protect the quality of the service. For further information or to request a spot in our 2020—or beyond—coaching cohort contact us. We promise that there will never be any pressure and all services are provided on an unconditional money back guarantee.

If you practice like no one else, your practice can be like no one else!

Some of our giveaways I got to share with my colleague at coffee. (Graphic Design by Andrew Miller (andhegames.com and andhedrew.com)

If you practice like everyone else, your practice will be like everyone else!

Throughout my almost 30 years working in the health care field I have had great colleagues. These experts provide critical services for individuals, couples, and families. They are specialists—true experts—in their scope of practice and I happily refer to, collaborate with, and respect them for their work.

However . . .

Considering the “State of the Art”

Colleagues in our field as a group, perhaps like most industries, generally talk, month in and month out, about the same repetitive topics . . . referrals, going “fee only” (or dumping insurance), recruiting new professionals, insurance contracts, and procedures or techniques they are learning or implementing. Go to coffee with many in the behavioral health industry and you are sure to wind up talking about these issues.

There’s nothing, at all, wrong with that of course.. These are the daily concerns of the typical practice and the variables that owners/providers need to focus on to be successful. Many are happy to confine their “work life” to these issues but some of us are not.

For the “others” these topics, while necessary to deal with, are often redundant, task-focused, conversations that—like chores—need to be done but rarely result in a “bounce in the step” after the conversation. After almost three decades in the industry, while these continue to be necessary discussions, engaged in regularly, I find myself more interested in conversations about the national melodrama of politics, the latest cool product (currently Darn Tough socks), new technologies, or woodworking projects. Maybe you can relate?

A different practice

I was reflecting on this after a recent coffee meeting with a colleague. No, not because the conversation was a better version of the typical topics, quite the opposite, because it wasn’t—at least not the vast majority of the meeting. A meeting that I left feeling energized, excited, and ready to push my business forward. Why? What was different? What was different is we weren’t just talking about the same-ole-same-ole topics.

My colleage isn’t just practicing like everyone else. He is more entrepreneurial that the average clinician.

Through serendipity and the encouragement of others less risk-aversive, I have learned, despite my natural tendencies toward the opposite, to do the same. So our conversation wasn’t about insurance, referrals, recruitment and all the old repetitive topics. Instead, the conversation was about an upcoming training we are doing out of state, demonstrating for him a game we newly licensed to use in our training, possible opportunities with a local manufacturing enterprise, and discussions about developing our own new software games for training. All factors of my practice not being defined by the typical “private practice” label.

Sustained changes

This week, under this broader umbrella of Human Systems Consulting, we will be billing an engineering firm for coaching. Signing a training contract with a government agency to use games to train leaders on teamwork skills. Continuing our monthly trainings of other professionals on becoming consultants. Talking to a non-profit about the status of a 13 year old contract to determine if it will continue as is, change, or be terminated. Continue discussions about developing a communications/teamwork game with a software developer. None of this directly related to my full time private practice as a mental health professional.

If it sounds like work, it is. Is it But its work, I find, that invigorates. It’s not boring. It’s new. It’s mine. No one else, outside my team is doing what we are doing. It continually challenges me to grow and expand my learning, my skills, and, assumably, my value to systems who need some help. It also protects from some of the inherent risks in healthcare. All factors that makes the private practice less anxious, more sustainable, flexible, and versatile.

Normative vs. transformative

Now, if you tend toward the stable, comfortable, personality that enjoys routing, likes tweaking and improving know systems, and are perfectly happy with continued discussions listed in the first scenario—then good for you! You likely are not looking for something different or more. However, those who crave learning new things, challenging themselves to do more, want new vistas or horizons to explore . . . even if you are good at putting up with the first scenario . . . then this latter scenario is much more invigorating. In my experience, it is an antidote to burnout and makes you more enthused about both.

What would you like your practice to look like if you could choose to do whatever you wanted?

What services or products would you be excited to provide?

What’s stopping you?

Our Small Town Bank Locks it's Doors . . . and reminds me of a "road not taken" . . . and an Opportunity!!

The letter . . . For privacy reasons, the full letter is available to my email subscribers.

Our small-town bank locks it's doors . . . a road not travelled . . . and an opportunity!

A bank employee will now let you into the building . . . but only with the proper ID.

Our town only has a population of 2,000 . . . and it's in the middle of a rural area, in a state that has been referred to as "fly over country." So it's a bit shocking to get a letter like the one in the photo. I mean, this "ain't New York City!" to adapt the advertising slogan. We're used to leaving our doors unlocked, the keys in the vehicle, with the naive confidence that people generally "mean well" and can be trusted. No, this isn't "Mayberry" from the Andy Griffith show. But it's close. 

A quick side-note. Our site has grown over 60% this year. Thank you to everyone for visiting our site, recommending us to others, subscribing and and following our blog. We will continue to offer content through our blog, email list, and  our free eBooks in 2018!

Anyway, this letter reminded me of an event that happened about a decade ago. A bank President called me. She asked if I would be interested in setting up a state-wide Critical Incident Stress Debriefing network for her bank. At the time I was the Executive Director of a counseling center and had worked with bank leadership on a couple of her work-teams. 

I told her that we might be interested, but that I would have to find out more about what setting up and running a state-wide CISD network would require. My first call was to my professional "guru." He told me right away that the state operated a CISD team and that I should contact the head of that department. I did.

The result was disappointing . . . at best. It was clear that contact with this state-run program would be of no help what-so-ever. The program, to be fair, was designed to help "first-responders," an admirable ambition, and it was clear in the conversation with this bureaucrat that there was no room to provide this service to anyone outside the governmental system. To his credit, he was brutally clear; the legislative focus was on government and, as such, they would not provide advice, training, support, or even make available the names of counseling professionals they used across the state for their CISD services. It was a complete dead-end.

I called back the bank President. I described the experience with the state and informed her that, without being able to tap into existing resources, we simply would not be able to develop and provide this service. We were not equipped to identify, train, support, and provide the services state-wide as a small center with less than a dozen professionals on staff. It was not the right opportunity for that organization and my focus, at that time, was on building up the organization--not seizing on the opportunity to contract with the bank to develop and deliver this service.

But truth be told, it bugged me. I've never worked in government--but I have had a number of grants and contracts with legislative branches--and I am fully aware of the constraints under which they serve. What galled me was that here was a legitimate need and it went unmet. Being a problem-solver by nature it just didn't seem right to drop it. But we did.

This experience did teach me a few things that might be of use to you, my readers. Mostly, that their are unmet needs all around you and if you can uncover them, and find ways to help, you will never be without work to do and people who will pay you for the value of that work. But, more specifically . . . regarding this opportunity . . . 

1. Banks, fast-food restaurants, retailers have lots of attempted, and some completed, robberies that never make the news (in fact, in many cases, they work hard to make sure they don't!).

2. These events can cause significant turn-over and often negatively impact employee morale . . . directly impacting the "bottom line" of the bank.

3. There is no established system for addressing this need in the for-profit world. (at least not here or to the knowledge of many professionals I have asked in the past decade)  and despite training on what to do in such events and some education of the effects, there is no systematic follow up or support when the events occur.

4. There is no recognized standard way to recognize those that have expertise in helping these organizations (no state licensure or certification for CISD/M in general). Psychologists and counselors often get referrals for people who have been traumatized by these incidents and who are experiencing anxiety or other symptoms but it is rare (excepting, perhaps, public school settings) to provide this support at a group level.

Conclusions?

This is an untapped area for private practice consulting for professionals who want to get trained, develop expertise, and market these services.

Notice: Posts, like the one you are reading, are also available to be automatically sent to your email. (Subscribers also get additional information, with more specific advice and insights, offers of free resources, etc. for subscribing. If interested, just contact us.)