OT Private Pay Practice Start Up: Full or Part-time?
Should you start your occupational therapy private pay practice by going all-in and doing it full-time from the beginning or go the slow and steady route by doing it on a part-time basis?
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For Occupational Therapists looking to open their own private pay practice the first hurdle is typically the decision of whether to quit their existing job and jump feet first or to take the slower approach and build it on the side by doing it part-time. Understanding the challenges and risks with both approaches is key to determine which approach is the right one for you.
No matter what, there are risks associated with starting your OT private pay practice and knowing your risk tolerance, and your personality, will help you discover the best approach for you.
In this video, Doug Vestal, Ph.D., discussing the pros and cons with both approaches, how to determine which one is the right one for you, and if he and his wife had to start their OT private pay practice again if they would do it differently.
This video is not intended as professional or legal advice. Be sure to seek the services of a professional and understand the risks you are undertaking.
Transcript of Video:
I know that gets talked about on social media all the time. And you see successful entrepreneurs portrayed in media who just threw caution to the win and jumped right in. But that's not actually true. Most entrepreneurs are pretty risk averse, especially the ones that stay in business for a long period of time. It's not that they don't take risk. It's just that they take calculated risk. They have mitigation to their risk built in from the very beginning. Hi, I'm Doug Vestal and I help OTs just like you start and grow successful and thriving, private pay practices. And I make these videos from lessons learned from the mistakes we made when we started our private pay practice, so that hopefully you can become more successful quicker. You can start earning that income you want, and you can start serving your clients at the highest level.
And today we're going to talk all about whether or not you should start your private pay practice on a full-time basis or a part-time basis.
We get this question so many times. So we have OTs who are super excited to branch out onto their own start, their own private pay practice, but they face the conundrum. Should they put all their chips onto the table and go all in and start it from a full-time basis? Or should they do a more slow and steady and methodical approach from a part-time basis?
And look, I'm the OT private pay guy. So I definitely have an opinion about this. I'll share with you how we started our private pay practice. But before I give you any sort of advice, I think it's worth knowing the pros and cons of the different approach because everyone's different. Everyone is in a different financial situation. Everyone is in a different situation with their current job. So going into this eyes wide open is going to be critical to make sure you make the right decision.
So let's get into the pros and cons and then let's figure out what is the best path for you. Okay. So pro number one for going full time.
So quitting your job, or maybe you're just right out of school, but spending 100% of your time focused on growing your private pay practice is simply you're going to have the focus. So if you are 100% focused on your private pay practice, that means all of the jobs that you need to be doing such as hosting community workshops, meeting with referral sources, all of those things, you're going to have the time and energy to do because you're not juggling so many things, and that's going to lead you to making traction faster.
The second pro is that it's going to be easier to book with you. So if you have a full open schedule Monday through Friday, when you start getting those client inquiries and they want to book with you, if they call you up and they want to see you on a Tuesday morning, fantastic, you have the availability they want, see you on a Friday afternoon. Awesome.
You have the availability. You're not splitting your time and your ability to see your clients based on another job that you have. So that will allow you to start seeing those clients even quicker.
The third pro is that you can just simply iterate faster. It kind of goes back to the first pro, which is you are going to make mistakes. So the ability to try different things, see what's working. And when you find something that's working, say hosting a community workshop at a particular location, you can really start to lean into that because you have the time to do it. And so being able to iterate quicker, get those mistakes out of the way means you're going to get that traction a lot faster. But look, there are cons with going the full-time approach. And I would say, con number one is the money. So if you go full-time, you will lose your income from your current job.
And building a business is risky. It takes time to replace that income you have from your full-time job, with your private pay practice. It could take three months, six months. It could take a year, all depends on your unique situation. So you have to ask yourself, are you really in that financial position where you can go without an income for a prolonged period of time while you grow this? And what does that do to you from a stress level?
So you don't want to make panicked business decisions because you need money. So I'd say the number one con is the fact that you lose that income from your current job. And the second con is really kind of goes back to, to the first. And that is that all of your eggs are in one basket. And I don't just mean from a money perspective, but your mental energy, your, your physical energy is all spent on this business.
And if things start to take a little bit longer, if things start to be a little bit slower and you're pouring all of your energy into this, well, that can be really discouraging, right? You may get discouraged. You may lose some of your motivation if after three months, you know, the phone isn't ringing as much as you would like it to be. That can be really tough because you don't have other projects that you're working on. So those are the two main cons.
I would say let's hop into what the pros are for starting from a, a part-time. So the main pro for starting part-time is the opposite of the con for starting full-time. And that is money. So you will still have money coming in if you start from a part-time basis. So let's say you are working somewhere five days a week, and you have the ability in your schedule to drop down to four days a week.
Well guess what? You still have four days of income coming in, right? So that is money that allows you to pay your bills. It relieves some of the financial stress of starting the business, and it allows you to operate in a more state of abundance as you're approaching your business, because you're not as concerned about money, and let's be honest. Most people don't have the financial ability to just quit their job and start something new without worrying about the money that's coming in. So that is a major pro in the category for starting from a part-time basis. The second, and it's kind of related to the first is that it allows you the ability to invest as you go, because you're starting small because you're starting from a part-time basis. As you learn stuffand you have money coming in, you can buy those courses.
You can sign up for that mentoring. You can purchase those books. You can go in those business retreats that really allow you to lean into the skills that you need to develop as an entrepreneur in the OT space.
And the third pro is that the stakes are just lower, right? So you still have a job to fall back on, right? You are not out of the job market. You are still in the job market. So if things don't go as planned, you always have that, that part-time job to fall back on that, that four day a week job, that three day a week job that you've kept. And because the stakes are lower, oftentimes that means that you're willing to take an even bigger risk with your business, which is sometimes the exact thing that's needed for your business to really grow.
So let's talk about cons, right?
The cons of starting from a part-time basis. And we have two to cover. The major one I would say is how slow it is, right? Businesses take time. And if you are only devoting one day a week to your business, two days a week to your business, whatever you can, you can work out. Let's be honest. It's just going to take you more time to ramp up, right? So you have to be comfortable with things going at a slower pace. And if you're the type of person who is like, you know what, I just really can't stand my job right now. I really have to, to lean into the business thing. That approach may not be for you because you have to have the ability to sustain your momentum over a very long period of time, knowing that it's going to take longer potentially than somebody who is doing it from a full-time basis.
The second con is time management. Look, there are only so many hours in the day, and you are adding a new job on top of an existing job. Not to mention if you have a spouse, a partner or kids, how are you going to fit this in? How are you going to fit in the marketing for your business, the exploration of spaces to see your clients, the meeting with referral sources, all of these things are things that you have to budget and account for, and that
requires having a support system around you. It's fine. If you're single, you probably have much more unlimited amounts of free time to do this. But if you're in a relationship, if you have kids having that difficult conversation with them of, Hey, I'm investing in this, I need you guys to come along. This is the support that I need is absolutely critical. It can be done. My wife and I, we, we did it way. So 100% can be done.
Most OTs that I work with start from a part-time basis, at least for the first three months, if not the first year. So it absolutely can be done, but being aware of this time management challenge and the impact it has on those around you. So you can build the right social and safety structure is absolutely critical to your success.
So now that we've talked about the, the pros and cons of both full-time and, and part-time, really what should you do?
Well, look, everybody is different. Everybody's in a unique financial situation, work situation, life situation, but let me just boil down what I see. So here's what I think is that full time is the right approach for you. If you are in a two income household and you can withstand the hit to your income, or you have way more than the minimum amount of savings saved, if you're single and you have a very high tolerance for risk, so you don't mind taking that risk. You don't mind jumping feet first, you can weather the ups and downs from a financial perspective, from a stress perspective. If you have a high risk tolerance, then I think the full-time approach is for you.
Who would the part-time approach be right for? If you are risk averse, which is the vast majority of us, we can be fairly risk averse people.
So if you are a risk adverse and you have the type of personality that can sustain momentum over a very long period of time, because like I talked about with the time management and the other aspects is it's going to require you to continually show up for a much longer period of time.
So knowing your personality well, knowing whether or not you can sustain that momentum over a long period of time, if you are that type of person, then the part-time approach is definitely for you.
So what, what would I do? Uh, what would my wife and I do if we had to start all over again? So back in 2014, when we started our OT private pay practice, we did it on a part-time basis. So my wife, she was working five days a week. She dropped down to four days a week. We did all the sales, we did all the marketing, we built the community around the business and as she started to book, we slowly reduced her hours. So that is 100% the way we would do it again, mainly because of the risk, right? So it's always risky starting a business.
You don't have to go whole hog in it to have a successful business. I know that gets talked about on social media all the time. And you see successful entrepreneurs portrayed in media who just threw caution to the win and jumped right in, but that's not actually true. Most entrepreneurs are pretty risk averse, especially the ones that stay in business for a long period of time. It's not that they don't take risk. It's just that they take calculated risk. They have mitigation to their risk built in from the very beginning. So having that ability to have some income coming in while you're growing this, I think is the safest, most sure fired way to grow it slowly over time because here's the thing.
We always overestimate what we can accomplish in a year, but we vastly underestimate what we can accomplish in five years or in 10 years.
So your clients are still going to be there a year from now, two years from now, and taking that slow and steady approach as you build up the skills and you maintain that financial cushion means that you can outlast some of your competition who throws caution to the wind and is perhaps kind of reckless with their money. So I would absolutely, advocate starting from a slow and steady approach from a part-time perspective while you're keeping the income while you're learning the ropes. And as your schedule gets fuller and fuller cut down on those part-time hours.