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Tuesday 7 August 2012

Private Practice: Having Separate and Blended Business Identities

Way forward - or dead end?

This week: A reply to an email I recently received about professional identity. Here’s the message:

I am in private practice and I am situated at a clinic with two other practitioners. They/the clinic has a brand and I have my own brand and somehow we are trying to establish a "we." It’s like blending a family.  

We do want to work together, but I'm finding it hard to keep my identity separate without the other therapists feeling shunned. I would appreciate a blog post on working together with separate identities and practices.

This is a tricky issue but one that frequently arises when clinicians join forces. Essentially, this writer had a pre-existing clinical service, with name and website. He then joined up with two other clinicians and together they formed a new business with a new name and website. The question is whether he really wants to form a new family, or whether he just wants to rent a room from someone else’s family.

His hesitation:  If he stops doing business under the old name and cancels the website, he loses all of the positive regard and name recognition that took him several years to develop.

But if he keeps doing business under his old name, he fears that his colleagues may feel excluded and question his commitment to the new venture. Also, it may be confusing for referral sources.

The first issue is to figure out whether there really are two different businesses here. Does the author work fully in the space with the other two? Or does he work with them part-time and maintain another office for the rest of his work?

If he has two separate businesses, there is no real issue. He should maintain “John Smith Counseling” (not the real name) with an address at 123 Oak Street. He should also appear on the joint service website, which we’ll call “Sunrise Therapy.” His description on John Smith’s website should mention “I also contribute to the work of Sunrise Therapy (webaddress).” And his personal bio on the Sunrise site could say (if his colleagues agree – and they are entitled to veto this) “I also provide services on the west side of the city through my own practice (see johnsmithwebaddress).”

Let’s imagine, however, that “John” has moved in with “Ann” and “Rob” full time and does not maintain separate office space. In this case, he needs to decide whether he will maintain two streams of clients – those referred to “Sunrise” and those referred to “John Smith.” Doing this, in my view, leads to unnecessary confusion. He really is functioning as part of a joint practice, and I would recommend that all clients be considered clients of “Sunrise”.

What about finances? This group has decided on a fee sharing arrangement. Clients make payments to the clinic, then a percentage of these is retained by the clinic to pay for rent, assistant, phones, and so on. All clients seen at “Sunrise” use the space, say hello to the assistant, and so on, and so all billing should be the same, regardless of whether the client arrived there via a referral to “someone at Sunrise” or to “John Smith”.

On another note, this questioner mentions that part of the point of getting together with the others was to get more referrals – but it turns out that the majority of his referrals come directly to him, and that he has had very few referrals through the joint venture. My query here would be: What does your percentage pay for? It may seem as though John is getting nothing, but the majority of the Sunrise “cut” is likely to be paying for rent, assistant, stationery, phones, and so on. Only a small proportion of that percentage will be going to promotions, and it will take time for the new venture to build up a name and clientele.

Should John retain his personal website? Yes. Here he can add whatever content he likes, without having to get it vetted by his colleagues and without running the risk of outshining them with his volume of contributions. But now that he is part of “Sunrise” he should tone down his own business identity. His header should now say “John Smith, (degree)” rather than “John Smith Counseling,” which sounds like a company name. His company is now Sunrise, so he should avoid confusing the issue. Should he eventually leave Sunrise, he can always change his own header back.

In his website content, he should now clearly state that he offers clinical services through “Sunrise Therapy,” and he should provide numerous links throughout his site with the Sunrise site. On the Sunrise site he will presumably have a personal bio, and this should include something like “For more information about me, see my personal website here (link).”

What if John and Sunrise have both incorporated? I would suggest that he consult with an accountant about this. If there are no objections from the accountant, however, I would suggest that all clients seen on Sunrise’s premises should be billed through the Sunrise corporation. At the end of the month, Sunrise should issue a cheque to John. The accountant can comment on whether it would be better for the cheque to be made out to John Smith or to John Smith Counseling Inc. It may be best to let John Smith Counseling Inc. become inactive, and just use Sunrise Inc as the business.

All this sounds fine, but what if John is really a bit iffy about Ann and Rob, and isn’t completely sure he wants to be tied to them? In this case, he could redefine the relationship as one in which John Smith Counseling Inc simply rents space from Sunrise, and keeps going as an independent entity.

In this case, however, John would not be entitled to be listed on the Sunrise website. He is only a tenant renting the space that Sunrise cannot use; he is not a part of Sunrise itself. On his own website he would list his street address but would not include the Sunrise name. He would be entitled to request that the door plate and building directory include both businesses for the suite that they occupy.  He would also request that clients make out cheques to “John Smith Counseling” and would provide them upon intake with a notice that he is not affiliated with Sunrise except for sharing office space.

And what if the three participants have wildly different areas of expertise? In this case, it will be difficult for Sunrise to develop any kind of cohesive identity. It would be better to have different businesses with different identities – like conglomerates do when they retain different brand names for their pasta and automotive divisions.

Also, what if one or more of the trio also has a side business in something else? Perhaps John does clinical work, which is the main Sunrise business, but also has a sideline in professional training workshops. He could choose to keep this aspect of his work separate from Sunrise and bill it through his own business – particularly if he does not use any of the Sunrise facilities or resources for that part of his work.

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Got a question about psychology, therapy, or practice that you’d like to see addressed on this blog?  Drop me a line at: paterson (at)

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1 comment:

  1. Interesting. Thank you for clarifying that.