Top 8 Business Struggles for Therapy Practice Owners in 2025

I spent the first months of 2025 on complimentary calls. I spoke with 51 therapy practice owners across the Chicago area and the country.

Different specialties, different markets, different revenue levels—but the struggles? Almost identical.

What 51 Therapy Practice Owners Told Me About Their Biggest Business Struggles

Strategic planning topped the list. Owners asked:

• How do I optimize what I’m already doing?
• Should I add a new service?
• Should I scale? Should I hire?

The subtext was always the same: “I’m so busy running my practice that I can’t think about where it’s actually going.“

Here’s what I know from 25+ years in this field: practices that grow intentionally rather than chaotically treat strategic planning like a client appointment. It’s non-negotiable calendar time—usually quarterly—to step back and ask the hard questions.

What helps: Strategic Planning for Therapy Practice Owners

Start with one strategic question per quarter. Not ten. One.

Maybe it’s “Should I add this new service?” or “What would it take to hire my next team member?” Give yourself permission to think slowly about big decisions instead of making reactive choices when you’re overwhelmed.

But the best approach is a comprehensive review to build clear short- and long-term plans – like owners in Traction Pods complete over 6 meetings.

A quarter of owners said their referral sources were down or inconsistent, and the panic was real. When your phone stops ringing like it used to, it feels like the bottom is falling out.

The practices that weather referral fluctuations best have built multiple referral streams instead of depending on one or two key sources. They also actually track when and where clients come from—they don’t assume they know.

What helps: Managing Referral Sources for Your Therapy Practice

Know how many requests for service you get, your conversion rate and how many you actually need. Don’t tell yourself (an unqualified) more is better. It’s not.

Audit your referral sources quarterly.

• Which relationships need attention?
• Where are you over-dependent?

Then block time each week specifically for relationship-building. Not just showing up at networking events, but genuine connection with the people you meet there as well as those already referring to your practice.

This showed up in different forms. Some owners asked about increasing their personal income. Others mentioned undercharging, people-pleasing, perfectionism, or just wanting more stability.

Here’s the uncomfortable truth: if you’re working more hours than you want for less money than you need, something has to change. And that something is probably your boundaries, your pricing, or both.

What helps: Managing Practice Owner Compensation and Profitability

Calculate your actual effective hourly rate—total compensation divided by total hours worked, including admin time.

Is it what you thought? Then look at your pricing through this lens: what would you need to charge to work fewer hours and pay yourself more?

The number might scare you. That fear is information worth examining. (For more on addressing your role and responsibilities, see my blog entitled Unblocking Your Psychotherapy Practice.)

Nearly a quarter of owners said some version of “I’m disorganized,” “I’m winging it,” or mentioned struggling with time management and delegation.

Let’s be honest: most practice owners are better clinicians than managers. That’s not a character flaw—nobody teaches this stuff in graduate school. But at some point, an ad hoc approach stops working. You can’t scale chaos.

What helps: Creating Processes and Workflows for Your Practice

You don’t need perfect systems. You need some systems. Start with whatever is currently your biggest drain or causes the most errors. Document the process, even if it’s messy at first. Then train someone else to do it. The goal isn’t to systematize everything overnight, it’s to gradually build a practice that doesn’t completely depend on you remembering and/or doing everything.

Some owners mentioned team management issues—compensation, expectations, interpersonal dynamics. A few specifically said they were paying their team more than was sustainable.

Managing people is hard. Managing people in a small practice where you, the owner, wear multiple hats and the boundaries get blurry? Even harder.

What helps: Managing and Compensating Your Therapy Practice Team

Get clear on roles and expectations first, compensation second. Most team tension comes from misinformation and misaligned expectations, not money.

If you’re paying more than you can sustain, that’s a business model problem, not a generosity problem. You need to either find more profitable revenue streams or restructure your compensation matrix—simply chasing more volume when you’re already unprofitable won’t solve the underlying issue.

About 15% of owners asked for marketing help—SEO, website feedback, social media tips & strategy. They knew they needed to be more visible but didn’t know where to start or what would actually work.

Here’s what concerns me: too many practice owners are relying on Google ads or SEO to magically pump a steady stream of requests into their inbox, while overlooking the power of real person-to-person connections with other clinicians and professionals they don’t yet know.

When the algorithm changes—and it will—those owners are left scrambling. But word-of-mouth referrals and strong cross-practice relationships? Those don’t disappear when Google updates its search rankings.

Real networking isn’t showing up to an event and collecting business cards. It’s building genuine relationships with other clinicians in your community. First, it’s becoming known as someone who’s trustworthy, likeable and interested in others. This comes before getting known for being good at what you do, or someone who follows through or takes good care of clients.

Networking is introducing yourself when it would be easier to sit back, giving instead of trying to get and relating with curiosity to others. Having coffee with colleagues, offering or being asked to present at staff meetings, getting referrals comes overtime as you build good will and a reputation.

What helps: Building Visibility Through Networking and Referral Relationships

Before you throw money at SEO or social media, ask yourself: do you have a visibility problem or a conversion problem? Are people not finding you, or are they finding you but not booking?

Start with the basics:

• Is your website clear about who you help and what problem you solve?
• Do you make it easy for potential clients to schedule an intake conversation?
• Then, commit to relationship-based marketing: reach out to one new colleague per week or attend one networking event a month.

Offer value without expecting immediate returns. Build a reputation in your professional community or in a key community of potential clients. Going to where clients are instead of waiting for them to come to you speaks volumes about who you are. These connections compound over time and can create a referral base that’s resilient, not dependent on algorithms you can’t control.

About 10% of owners admitted they didn’t understand their numbers—outstanding accounts receivable, whether they were actually profitable. Or, they needed (but didn’t know they needed) bookkeeping support to help make decisions, not just an accountant who prepares their taxes or mysteriously calculates how much you can pay yourself.

This one breaks my heart because financial confusion keeps good owners trapped. You can’t make smart decisions about pricing, hiring, or growth when you’re flying blind.

What helps: Tracking Profitability and Cash Flow in Your Practice

Find a bookkeeper or accountant who actually explains things in plain language. (For more on this see my blog entitled Bookkeepers: Worth Their Weight in Gold.) Then commit to reviewing your numbers monthly—not just glancing at your bank balance, but actually looking at profit and loss, understanding your margins, tracking your collections rate.

Thirty minutes a month can transform your relationship with your practice finances – and your sense of yourself as a business person.

About 10% of owners brought up exit planning. Whether they were thinking about selling, transitioning, or just knowing they needed some plan for a future beyond their current ownership, they felt rutterless.

Exit planning isn’t just for people who are leaving their practice next year. It’s about building a practice that could run without you—which, incidentally, is also what makes a practice valuable and less exhausting to run!

What helps: Exit Planning and Practice Succession Strategies

Start documenting. Systems, processes, referral relationships, clinical protocols, resources. A practice that lives entirely in your head is neither sellable nor sustainable.

Second, ask yourself honestly how your practice can be run without you. What changes in leadership would you need to put in place to get out of holding it all yourself?

Even if you’re years away from exiting, building toward that capability makes your life better now.

The Pattern I Keep Seeing: Clinical Training Doesn’t Prepare You for Business

Looking across all these conversations, there’s a clear thread: most therapy practice owners are incredibly skilled clinicians who are trying to figure out business management in real-time, with very little support or training.

The struggles aren’t because you’re doing something wrong. They’re because running a practice requires a completely different skill set than the clinical work you trained to provide.

You learned how to be a therapist. Nobody taught you how to:

• Read a P&L statement
• Build scalable systems
• Manage a team
• Price your services strategically
• Plan for growth
• Market effectively
• Navigate insurance contracts
• Forecast capacity and revenue

And yet here you are, expected to figure it all out while also seeing clients, hiring & managing staff, putting out fires, and keeping the doors open—all while the ground keeps shifting beneath your feet.

Why This Moment Feels So Impossible

Before I tell you what I think helps, I need to name something: the external pressures on therapy practice owners right now are unprecedented.

Insurance reimbursement rates are 15-30 years behind the cost of living. Your practice expenses have doubled while your insurance payments have barely budged—or haven’t moved at all.

Meanwhile, insurance premiums keep climbing – and that hurts everyone. Meanwhile insurance companies increase audits, roster proceudres, requirements for session documentation and reimburse you less.

Venture capital investors are aggregating practices and online therapy platforms are flooding the market, creating competition that wasn’t there five years ago.

And then there’s the generational challenge: newer clinicians often enter private practice under-trained and over-confident, with compensation expectations that don’t match their experience, their productivity or the economic reality of what practices can sustainably afford.

Oh, and the political stressors? At an all-time high. Your clients are struggling. You’re struggling. Everyone’s carrying more than they should.

And looming over all of it: the AI question.

What’s the future of psychotherapy when AI chatbots can provide mental health support? Who will choose AI over human therapists? How will widespread AI adoption affect the size of your market? These aren’t hypothetical concerns anymore—they’re real questions that keep practice owners up at night, wondering if they’re building something sustainable or watching their profession transform beneath their feet.

Here’s what makes this so brutal: many practice owners can’t just leave insurance panels when requests for service are already low. Most can’t simply raise their prices (except for out-of-pocket clients which can feel unfair). The usual business levers don’t work the way they’re supposed to.

There’s no easy way out. No magic solution. No cavalry coming.

But here’s what you can do:

• You can take control of what’s actually within your control.
• You can stop reacting and start managing proactively.
• You can learn how to position your practice strategically in this dynamic environment instead of just hoping things get better.

You can’t fix the healthcare system. But you can build a practice that’s resilient enough to weather it. And that’s what business fundamentals give you; the clarity and systems to navigate it more effectively than you can right now.

The Missing Piece: Structured Support for Practice Management

After hearing these same struggles over and over—and living through many of them myself as a former practice owner—I saw what was missing: experienced coaching, structured, peer-based support focused on building and applying practical business fundamentals to your practice in real time. That’s what Traction Pods provide.

The practices that thrive aren’t run by people who have it all figured out. They’re run by people who’ve decided to treat the business side of their practice with the same intentionality they bring to their clinical work.

They seek support. They build systems gradually. They make time for strategic thinking. They’re willing to have uncomfortable conversations about money, boundaries, and priorities.

Not generic business advice. Not one-size-fits-all courses. But a structured, business-like approach to running a practice, taught by someone who knows this world inside and out, alongside peers who are building the same foundation.

And critically: they don’t try to do it alone.

What are Traction Pods?

Small cohorts of 4-6 practice owners who meet for 6 working sessions over 3 months to build the business fundamentals grad school never taught you. Learn more about Traction Pods.

Two Traction Pods are beginning in January:

• Solo Practice Fundamentals — For solo practitioners and small practices (0-1 employees) who want to build a sustainable, profitable practice without necessarily growing staff.
• Scaling Your Practice — For established group practice owners (2-12 therapists) who need to systemize operations, delegate effectively, and lead a team.

Join me for a free information session!

Build the Foundation Your Practice Needs

If you recognized yourself in any of these struggles—if you’re tired of improvising and reacting and hoping it all works out—it might be time to try a different approach.

The practices that thrive don’t wing it. They have systems, clarity, and a roadmap. They find their cadence, their pace and move forward predictably. Plus, they grow connections that last.

Join a free info session to ask questions, meet me, and see if a Traction Pod is right for you.

Or if you’d prefer, schedule a complimentary call and let’s talk about your practice, your challenges, and whether this is the right next step for you.