The Private Practice Success Podcast

70. How Much Should I Pay Myself as the Practice Owner?

• Gerda Muller • Episode 70

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In Episode 70, Gerda tackles a question so many practice owners wonder about but almost nobody talks about out loud: How Much Should I Pay Myself as the Practice Owner…? 

This episode was sparked by a brave (and very real) question Gerda was asked recently and while it can feel uncomfortable to talk about, it's a very important conversation to have. 

In this insightful conversation, Gerda shares what she’s seen practice owners pay themselves in the real world, why owner pay is often the first thing to disappear when margins get tight, and the key variables you need to consider so you can pay yourself in a way that’s sustainable, without sacrificing your team, your clients, or your future.

In this Episode, you will learn (among others):

  • What practice owners are actually paying themselves right now, and why the range is far wider than you might expect.
  • The key variables that should shape your pay, and why it shouldn’t depend on your clinical caseload.
  • The two main ways practice owners can pay themselves.
  • A simple but powerful way to benchmark your pay, including how Gerda personally determines her own pay..

Who This Episode Is For:

  • Practice owners who are unsure about what’s a normal or appropriate owner’s pay.
  • Group practice owners carrying financial pressure, team responsibilities, and risk, but not seeing the reward.
  • Anyone who wants to build a practice that’s sustainable for the whole trifecta: you, your team, and your clients.

Tune in for a candid, grounding conversation that will help you think clearly about owner pay and make decisions that support a practice you can’t stop smiling about 

The 2-Day In-Person 2026 Private Practice Business Intensive

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Connect with Private Practice Success & Gerda here:

Well, hello there fabulous private practice owner. My name is Gerda Muller, and you are listening to the Private Practice Success Podcast… and welcome back. Yes, it has been two weeks since I dropped an episode. Why? School holidays and the Easter long weekend. So I do hope you missed me. I sure missed chatting to you. However, I also hope that you used that opportunity to maybe catch up on any episodes that you have not listened to, to date, because I can tell you I really think about each and every episode before I talk to you about it. I always want to make sure that it is something that is relevant, and something that's going to be of value to each and every one of you as a private practice owner. The same holds true for today's topic of conversation. Today we are doing episode number 70. 

I was in two minds about this topic, but let me tell you the title first. The title is: How Much Should I Pay Myself as the Practice Owner...? Mm-hmm. Now, I decided to talk about this topic because somebody actually asked me a very brave and bold question, and the question was: ‘Gerda, how much do you pay yourself as a director of your practice, and considering that you don't see any clients?’ So I went, Hmm, I love this question. And if this person has this question, I'm wondering whether there's other people out there that have this question. The reason why I was really tossing up about talking about this is, well, the current state of the world. I never want to sound tone deaf because here I'm going to talk about how much should I pay myself as a business owner, when there are people out there really, really struggling right now in our communities, and we need to be so mindful of what is happening on the ground. 

But this is an important conversation to have, so I'm going to talk about it, because I think we also need to remind ourselves that small business owners, which are private practice owners, are also part of our local community. The majority of us still have brick and mortar practices. We are there at the coalface of helping people in our community. We are hearing how people are struggling, and at the same time, we are also in that community. We are not CEOs of large corporations. Our businesses aren't making billion-dollar profits. We are not even making million-dollar profits, alright? That's the truth of it. So we need to be mindful that small business owners, yes, they might be the owner, but they are there in the trenches with the community.  So we need to remember that when we talk about small business ownership, we can't use the same filter as we would for large corporations, because it's not the same. It's not comparing apples with apples. It's comparing apples with freaking  watermelons.. yeah, right. And I'm talking about the tiny little baby apple that you can find with the biggest freaking watermelon out there. It's not the same. 

I also want to share with you a conversation that I had with my accountant because obviously it's, you know, it's tax planning time, all of that type of stuff. So I'm meeting a bit more with my accountant than I normally would.  I met with him around two, three weeks ago now, and at the end of talking about my business, I said, ‘Hey, before you go, I just wanted to check in with you. What is your feel - in terms of, you speak with business owners across various industries every day - what is your assessment of how particularly small business is doing right now, considering the geopolitical state of the world? And this is what he told me. He said, ‘Gerda, in the last six months, I have had more discussions about insolvency with small business owners than I've had in the last 10 years.’ Now let that sink in for a minute. Because I'm pretty sure you've been going, ‘Yeah, it's hard at the practice. You know, things are tough. I'm hearing this from the clients. Maybe I'm hearing a couple of things on Facebook groups.’ But it's way worse than what you might have anticipated... way worse. 

You need to remember, people don't talk about this. There is shame attached to this, particularly if you've been working in your small business, whether it's Allied Health, construction, I don't know any other type of small business out there.  You've been slaving yourself at the feet of your business. You've been working yourself to the bone, working after hours, weekends, really trying to build your small business, and then you are failing. That is so freaking hard to admit to yourself, to your family, even way harder to admit to the world. So small businesses are slowly crumbling out there. So, it is my job as a business consultant coach and mentor to my fellow allied health small business owners, to be having these conversations, not in a tone-deaf manner, but in a manner of going, you know what? 

We need to have our eyes wide open as to what is happening right now - in terms of how it impacts us as individuals, hence today's conversation in terms of how much should I be paying myself so I can pay my bills, so I can look after my family. But also in terms of how does this impact my team? And very importantly, how does this impact my clients? Because if I don't look at all three of those parties, we are going to have to maybe close our doors, and that won't be good. That is one less service out there helping people with their mental health, helping people with any other needs that they have within the area of allied health. And I know that governments are constantly saying, we are giving funding for this, that and the other. You know what those big amounts of funding, majority of that money is going towards freaking overheads and administrative expenses. I can tell you now, and there's actually been independent audits done out there, you can go and Google this shit that shows how much it costs government departments to run similar services to small businesses. Small businesses can run a similar service for half the cost than what NGOs and non-for-profits does when they've got government funding. Because there's no incentive to run it more efficiently, right? It's like, oh, we've got this whole pot of money that we can now use. 

Whereas a small business, we need to freaking earn every bloody dollar, and we need to make it stretch and go as far as possible. So we are a lot more efficient. But anyway, I'm, I'm digressing. I'm digressing. I'm getting onto my pedestal now. I'm very passionate about this stuff. So much so that in May within my Private Practice Success Academy, I'm going to be running a round table discussion, really looking at the geopolitical state of not just the world, but how it impacts us here in Australia, how it impacts each and every one of us in our location. It is such an important discussion to have right now to really open up our eyes as to what is happening, and how we as responsible business owners, responsible small business practice owners, need to make the right decisions so that we can look after our team and the clients that we serve. So I want you to know that I'm very mindful of what's happening out there. I have previously done episodes here on the podcast talking about clinician pay. So if you are interested in those, I would recommend you go and listen to Episode 30 on Mastering the Margins that Matter, as well as Episode 61, which was called Remuneration Roulette: Why Guessing What to Pay Your Team is Costing You More Than You Think. So those two episodes, if you are interested in how I need to think about paying my team in a way that looks after them, but also ensures that I run a sustainable business, are the two episodes that you need to go and listen to. 

Now I'm thinking I may also do another episode that talks more about clients. So maybe that should be the next one I do. But for today, let's get stuck into this question, the question of How Much Should I Pay Myself as the Practice Owner...? Particularly the state of the world right now. But you know what? I think this question is relevant both in times of feast and in times of famine.  I can answer this question in one of two ways. First, I can tell you my opinion on how much I think you should pay yourself, including the variables that will go into that decision, or I can tell you what people are actually paying themselves right now, what is happening in the market. I'm thinking let's start by not giving you my opinion. Let's start by sharing with you what I have seen. 

What Other Practice Owners are actually Paying Themselves

Firsthand people pay themselves, because I'm pretty sure I would've shared this with you previously, but when people start working with me in my Private Practice Success Academy, which is a mastermind program where you get to work with me in both a group and a one-on-one setting - as part of your onboarding process, I send you a diagnostic assessment, which basically is questions about your business and people complete that because what we do when you come on board is we benchmark where you are at. Just like you would benchmark people when you have session one, so you can track progress and client outcomes over time, I do the exact same thing with my business consulting clients. I want to see where your business is at when you started working with me, so that in 6, 12 months’ time, we can reassess and make sure that you are getting that return on investment that you're making In terms of working with me, but also just so that you, you know, get your return on investment on the hard work that you are putting into your business, so you can stop spinning your wheels and actually move forward. Because when your business grows, it's good for you as the business owner, but it's also good for your team, and it's good for your clients. 

So anyway, one of the questions in there that I ask is I ask people: How much do you pay yourself as the practice owner? Whether that is paying yourself a wage or paying yourself owner's drawings. It doesn't matter how you do it. What is the money that you get from being the business owner? And this is the range that people have shared with me over now. I think it's now in our 11th year of me running Private Practice Success Australia, and this is the range. Are you ready for it? $0, to the highest was $250,000 per annum. That is the range. Now that is a humongous range. And you might be thinking the $0 is probably somebody starting day one. Yeah, a lot of them. But I have had people coming into The Academy paying themself $0 in wage and they've got what I would normally refer to as a Level Five Ultimate Private Practice. You know that practice that you look at and you go, geez, that practice owner's doing so well. They've got like, you know, 10, 15, 20 people. They've got three different locations. Their social media is just like the next level. And then that person comes to me and says, ‘I've built a monster Gerda.  I pay my team really well. We are very reasonable with our prices. But there's something going on here because I can't pay myself a dollar.’

And again, there's a lot of shame attached to it, because any reasonable person would think that if you've got a business like that, surely, you're paying yourself at least $80K a year. Maybe $100,000 for that type of business as the business owner - surely. I can't tell you how many times that happens. And you may not believe me, but it's true. I. I promise you. I've seen it way too many times, and you know what? Then I go, you made the right decision coming in because we need to. We need to fix this, because this is not okay. I love it when people look after their team and look after their clients, but there's a really important third part of this trifecta in order to have a long-term sustainable business, and that is the practice owner, because there's a reason that person reached out to come and work with me, because it's just not sustainable. You can only do it for so long, and unless you do have a partner or a spouse that earns really great money, you can't sustain it. What happens if something happens to you, your spouse or your partner's job? They lose their job. They get made redundant. Something happens and they can't work anymore. You freaking effed. So you cannot take that risk. And if you take that risk, and if that happens as a practice owner, you can't pay yourself money. 

All of a sudden you need to be the breadwinner because your husband or partner or wife or whomever can't get a job. You're going to have to close the doors and go and work for freaking Queensland Health. Ultimately, we all need to pay our own bills. We all need to feed our family. So you have to make sure that you can at least pay yourself freaking minimum wage. And yes, then we've got the flip side of people paying themselves $250,000. Now that doesn't happen overnight. That is a 20-person group private practice. It's most certainly on the much, much larger size. It is an outlier, I would call it that. And then of course, you've got the average, or you have the medium, where the majority of group practices is probably sitting at around eight full-time equivalent clinicians. So there's a humongous range. I'm not saying pay yourself $0, I'm not, you know, like be a martyr and pay yourself $0, please don't, you're looking for trouble and it's not going to last. And I'm also not saying you should be paying yourself $250,000, because each of our situations are going to be different. I'm just sharing with you the data. That's all I'm sharing with you. 

Now that $0 to $250,000 is data that I have received on paper in black and white over an 11 year period. And a lot of things have happened in those 11 years, but that is the range. Just that's the facts, okay. And that is, yes, majority psychology practice owners, but also a lot of occupational therapy practice owners that I work with, those are my two main ones that come into my program. I have had speech pathology, social work, counselling, dietetic, and physio, but I would venture that that would probably be applicable across allied health.  Alright, so that is what is happening out there. So maybe think, on that range, where are you? Where's your pay right now? Whether you are a solo practice owner or a group practice owner, I will say, and I'll preface this with the people that I work with in The Academy are generally already group practice owners, or there are solo practice owners who are ready to expand and they want to do it right, right from the start - they don't want to have to go through change management because they've built a monster of a business and now we need to walk a couple of things back before we can move forward again, and they don't want to reinvent the wheel - so those are the people that come into my world in The Academy and that I base those numbers off, okay, so that is what I've seen. Next I want to give you my opinion on the variables that I think you need to consider when making this decision about How Much Should I Pay Myself as the Practice Owner...?

Variables to Consider when Deciding Practice Owner Pay 

I am sorry that I'm not going to give you an exact number because the annoying answer is -  it freaking depends, as with most things in life. So I'm going to share a couple of factors that I would encourage you to think about, and some of my thoughts around this. I'm going to particularly talk to group practice owners, but if you're a solo practice owner listening, please don't stop listening because a lot of these concepts are going to apply to you as well okay.

The first thing I want you to consider is what stage of business is my practice in right now? Are we in a growth stage? Are we in a consolidation stage? Now personally, I would love you to be able to pay yourself ongoingly whatever you pay yourself. So once you've made a decision of what that is, you want to be able to maintain that rate of pay. But sometimes if you go, you know what, I'm really going to commit to significant growth, what some people do is they pay themselves less. Now the people in Silicon Valley, you know the bigs tech startups, they will never do that. What they would do is they would go and borrow money. And I'm not saying go and borrow money, I do not encourage you to go into debt. But some people might go, no, I'm going to go get those funds from elsewhere. I see that as an investment in my business. But as small business owners, we generally don't do that. Generally, people that I work with are very risk averse, allied health professions. Like I don't want debt, I don't want all of that stuff. So what do we do? We say, I'm just going to pay myself less so that I can invest in the growth of my business. And, you know, that's what small business owners do. 

That's why I said at the start, people shouldn't compare small businesses with medium and larger sized businesses, because they would never do that. They would never cut their own wage to invest into their people, to invest into their clients, to invest into the future of their business, no, they will go and get credit. Whether that's a business loan investment from other people, or credit cards, that's what they would do. They would never cut their own wages. Small business owners, allied health practice owners do that all the freaking time. That's the first thing they do when they need money because their margins aren’t what they should be or their cash flow is impacted or some things happen. I see it all the time. I would love for you to be able not to do that. But in order for you not to do that, you need to go and listen to that episode I mentioned previously on The Margins that Matter.   

So what stage of business are you at? Are you in the growth stage, where you really want to invest more? Are you in a consolidation stage? Again, I just want to reiterate, my recommendation to you is that you should be paying yourself a level of pay that you can maintain throughout that. Because if you can't, the stress it's going to cause you is going to impact that growth that you so desperately want. And let's not do that to ourselves. Business is hard enough already. So that's the first thing you want to consider. 

The second thing you want to consider is your personal situation. All of our personal situations are different. I speak to a lot of practice owners, when I have their first session with me one-on-one that they would share with me, ‘I just had to jump in and start working with Gerda because I'm actually the bread winner.’ And they often share with me why that is the case. And sometimes it's just like that's how their life is set up and this is how it's worked out and that's what works for them. But they're the breadwinner and that is a lot of freaking pressure. In terms of making sure that this business that they started succeeds and they also have to earn an income. They can't afford not to earn that income because they are the breadwinner. They've got 1, 2, 3, kids at home that they need to look after, and they're not living the freaking high life. I can tell you that either. So there's a lot of pressure there to make sure that they can look after their families. So are you the breadwinner of your family? If so, you've got a responsibility to look after them. And maybe you're not the breadwinner so you don't have that stress and pressure and, and you know what? No judgment. That's okay. You are in a fortunate situation where you don't have that additional pressure. 

The other thing I want you to consider is what is this business for you personally? Is this a business or is this a hobby for you? And no shade as the young people say. No, shade if this is a hobby. That is freaking okay. The more people that have a hobby private practice, the more people are out there able to support clients, maybe at a bulk billing rate, maybe at a really reduced rate, because this is just your hobby. You want to stay busy, you want to serve people, you want to stay in the industry, but you're not reliant on the income. That's fine. Okay. You do you. But for the rest of us for whom this is a business, we can't treat it like a hobby. You can't, okay. You need to treat it like the for-profit business it is. 

Whilst I'm on this topic, please stop treating it like your public mental health. Trying to compete with public mental health when it comes to recruitment and S and wages just stop, okay. It's going to feel good for the first six to 12 months. It's like, oh, I pay public health rates. I can match those. It's not going to last because it's not freaking sustainable because you don't get government funding. And I'm going to be talking to you in 18 months from now when you all freaked out and stressed because of the debt that you are in. And you are not a non-for-profit. You don't get grants. You know how hard it is to get grants from the government when you've got a for-profit business. It is incredibly difficult. Even if they say you can apply, the chances of you winning a grant or a tender, it's very, very slim. So, please, we have to live in reality that we are PTY Limited. We are a for profit business and there's no shame in that. And if you have chosen that this is not your hobby, this is going to be your business, then you need to treat it like one, which includes paying the person that runs it. No other business out there is going to get somebody to work for free. And I'm not saying pay yourself $250,000, but at least pay yourself something.

The other factor, which is more like (this is not a factor), is how many clinical clients are you seeing? Because a lot of practice owners I talk to have this thinking that if I'm not doing any clinical work, then I should be earning less money, because like I'm not contributing. Nope. That should not be a thing. The wage that you earn as the practice owner should not be linked to the amount of clinical work you do, because guess what? You should actually not be doing any freaking clinical work, because that's not the job of the business owner. The job of the business owner is to run the business. Maybe not even that. I'm going to correct myself there. It's not even your job to run it. It's your job to grow it. It's your job to sustain it. It's your job to future proof the business - that is what you get paid for. If you then choose, because you've got really great systems, processes in place, which means you've got time on your hands, and then you want to do clinical work because at the core in your heart, you're still a clinician, then go for it right? 

So if I were to do clinical work in my practice, I wouldn't expect to get paid more for it. I would just see, well, that's, you know, part of what I get paid for, and it just goes into the revenue, into the business. Just like my clinical team gets paid, their wages, they'd say they're full-time equivalent, and whether they see 25 clients in the week, 15 or 5, they get paid the same amount of money. It's the same with me. I get paid for the job that I have, for my job description and for the work that I do, and it shouldn't be relevant to clinical work. Now you get to run your business in a way that works for you if you want to go, ‘Okay, Gerda, I want to have a wage and maybe I'll take a smaller wage, but I'm going to take all the money from the clinical work I do because I do a shit ton of it.’ Then do that. That's the beauty of being the business owner. You get to decide. But I always go like, as the business owner, you need to have a set wage and that set wage - X amount of dollars, that works for you, that your business can sustain right now - need to be irrespective of the number of clinical clients that you are seeing. And you might see zero clinical clients, or you might see 20 a week. But I don't think 20 is a good number because you're not going to have time to do your job as a business owner, and that's when you start spinning your wheels and you start going, I don’t know what the hell is going on here. All of that stuff. 

I would always recommend, let's build the business to a place where it's like, what I like to refer to as a Self-Running Practice. Where now you've got the time to do more clinical work. But there's a lot of ways to get there. I do work with a lot of people that go, but the clinical work is what I love. It's what lights me up. There's always a pathway to getting to what you want to do. And we're not going to go into the details of that right now. The point I want to make is that your wage as the business owner needs to be the same, irrespective of how much clinical work you do. So now that we've considered all these factors that I've just spoken about, I want to share with you two ways that you can get paid as the business owner.

Two Ways to Get Paid as the Practice Owner

I want this just to be an introduction to that conversation, and I would encourage you to make some notes here and go and chat to your accountant about this. Alright, so our initial question was, How Much Should I Pay Myself as the Practice Owner...?  Well, it depends. As I said, there's factors to consider. But I also want to talk about the how, not just how much, but how. So there's two ways that you can get paid and probably should get paid in a monetary sense, right? We get paid in a lot of non-monetary sense when we are a business owner, but when we are talking about money, there's two ways to get paid.  First, you can get paid as the director of the business, and secondly, you can get paid as the CEO of your small business or the principal psychologist of your business, operations manager of the business - whatever word or title you use for that role that you play in the business.

Let's first talk about the director role. So when you are the director, and you would be a director if you have a PTY limited. So, if you have a company, so you are a for-profit business, you are a director of a company. And that also holds to, if you've got a trust structure. So a trust structure like I've got, there's a family trust, and then there's a company that acts as the Trustee for the Trust, but at the end of the day, you are a for profit business. So, if you are a for profit business, you should be paying yourself as the director, as the owner, the business owner - the person taking on all the risk here. Because if the shit hits the fan, the ATO is coming to you, ASIC comes to you. If you land in trouble along the way, you are the personal guarantor for the business, so all the risk is on your freaking shoulders. You are also the one investing time, money, and energy to take that risk. Yes, our clinicians also invest time, money, and energy into the business - different conversation. Today we are talking about this specific context as the business owner. As the business owner you are not only working nine to five, let's be honest, some of you might have figured this out. 

The majority of people that come into my world are totally overwhelmed, totally overworked. They do their nine to five, they do the kids when they get home, and then when the kids are in bed, they keep on working until midnight, until they fall asleep with their laptop on their lap, and tomorrow they do it all again. They go to sport with the kids on a Saturday, and they're sitting there on their phone, sitting there with their laptop, Trying to juggle, getting stuff done. Sundays, what are they, what are they doing? They're doing admin to prep for the week ahead. It's that investment of the time and the energy. That investment of money, like if there's not enough money and I need to pay wages, where does it come from? It doesn't just magically fall out of the sky. There's no government funding There's no pot of gold at the end of the rainbow. No. This practice needs to get it out of their own account. Take money from their partner or spouses. Wages need to go into the redraw if they're lucky enough to have that in their mortgage, in order to pay the team, or they just need to forfeit their own wages for that week. That happens more than you think. Happens so often shouldn't be happening, but it happens. But as the business owner, that is the investment. That's the risk. 

And you know, if somebody's listening to this and goes, ‘Well, you wanted to be a business owner, that's not my problem.’ True. Right? We need to take accountability, that as the business owner, that is what you are taking freaking on. If you decide to open up a business, whether it's an allied health business or any business for that matter, that is the risk that you take, that is often the investments that you're going to have to make.  Now, if you get proper business coaching from somebody who has been there and done that, and made all the freaking mistakes in the book, you can avoid a lot of that shit. Now, I encourage you not to learn the hard way, because that is when you're paying money towards the school of not knowing, and everybody out there thinks they know everything. We don't. You don't? I don't, we don't. But that is what often happens. That is the choice that we make when we become a business owner. It's like, cool. Yeah, I'm going to take that ownership. I take that accountability. I personally would not give this up for a normal job. 

Depending on your stress levels right now, you might be going, I just want to run and hide from running this business. I just want to wake up tomorrow morning, and not have this business, and just have a nice cushy job. Just go in, do my work, and come back home again. But when you're a business owner at your core, that's not who you are. It's not who you are.  You love the rush. You love the challenge, you love the climb of this mountain. I don't know, that's how I am. I could not go and work for anybody else, but I also need to accept that that means that this is the risk that I take, it's on my shoulders, which means that I need to be really clever when I do this. I need to look at the data. I need to get consulting, coaching, and mentoring. I need to have accountability - somebody that keeps me accountable to this stuff, because it is so worth it at the end of the day. I can tell you that for sure. But I hope I've made my point here. So as a director, you need to get paid. Now, that is generally not a set amount. That's not the wage that I've been mentioning. Your pay as the director, generally, and this is why I said speak to your accountant, most people would look at how that we do last quarter. So it is now like April, we've just gone through the January, February, March quarter of 2026.

So what we would generally do is look at, okay, what was the profit for that period? And is there scope for a profit distribution to the director? This is where the director, AKA business owner will also make that decision in terms of, okay, so what are my plans for the next quarter? Or maybe even for the next six months. Because if I'm going into a quarter where. there's going to be growth where my goal is a quarter of growth, then maybe I don't want to even take that money. Maybe I do want to invest that money into the business. Do I know what I'm going to use that money for? Or maybe I'm going to not take my usual profit percentage, but I'm going to take less because I want to invest that. 

And this is therefore where you need to sit in that space of considering meeting with the accountant and saying, okay, this is what the money was, this is the profit on paper, of course, is another important point. What is the profit in the bank account? Because a lot of times there's discrepancies there. How do we understand this? What is happening here? And given all of that data, do I want to pay an amount out to myself for this quarter, which could be $100, it could be $1,000, it could be $10,000 depending on how your business is doing. Or am I going to keep it there because I know it's now being assigned - every dollar there is now going to be assigned and it's going to get a job in the business for the next quarter. And then after this quarter, I'm going to consider this again.  So that is that profit distribution to get paid as the actual business owner that takes all the risk and makes a lot of investment into the business. 

And then a level below that is what I refer to as your wage, which really for me, it comes back to that initial question of how much should I pay myself as the practice owner? That's generally the wage that I'm talking about and thinking about, because just like any other person in your business, I would encourage you to pay yourself a set wage, whether that's weekly or fortnightly, some people probably pay themselves monthly. That wouldn't work for me. I personally pay myself weekly. Just paying yourself like you put yourself on the payroll like you would any other person. And if you're currently not doing that, just start with the lowest amount that you can afford and just go from there. But this is where you pay yourself for being the CEO of your small business, for being the person running the show, for being the person, doing the marketing, doing recruitment, doing the onboarding for all the day to day stuff that you are doing in the business. 

But I also want you to think of this wage as follows, particularly if you're not paying yourself wage now, or maybe you're going, I know that this is a shit wage that I'm giving myself and should probably be more. I want you to consider, if tomorrow as a director of your business, you decide, you know what I'm going to take myself out of the CEO, principal psychologist, principal clinician role, and I'm going to hire somebody to come and do that job for me… how much would you need to pay somebody to come and do that? How much would you need to pay somebody to step into that principal clinician role, and for them to supervise the team. For them to drive the marketing for them to? Look after the reception team. For them to do whatever is on your job description as the principal clinician right now, What would be a market wage for that person?

Then I want you to go, Ah, what's the gap between what I would need to pay somebody like that, and this is what I'm paying myself. What is that gap like right now? Because ultimately, if you want a Self-Running Practice, you're going to need to do that at some point potentially. What would you need to pay that person? And how come you can't pay yourself that right now? And I'm not saying you all of a sudden start paying yourself that it's one step at a time. One step at a time. This is how you build your business, and it takes a lot of patience to get to that. But it's really about getting that vision in terms of, if I want to be able to build a business that I can also one day sell, this is what I need to be able to do. I need to be able to show that me, as the owner, do not have to do any clinical work - that the clinical income is not reliant on me. Because if it is reliant on you, you're not going to have a good valuation of your business. Because when you're gone, who's going to do that work? 

If I'm going to come in and buy your business, I don't want to have to see 10, 15, 20, 30 clients a week in order to get to that valuation. I just want to buy the business and not see any clients. So you're shooting yourself in the foot when you run it in that way. So just have a look at what that gap is, and just get some insight into what is happening here. Because all of this is going to give you information and insight around certain parts of your business that's probably not set up right now. Because if you've not looked at the margins in your business, if you've not made data-driven decisions, you're going to start seeing gaping holes here and a gaping gap here between a market rate for the work that you're doing, versus where you are at right now.

How I Pay Myself

And finally, I thought what I might do is just share with you the way that I've determined how much I should pay myself as a practice owner, and I've been doing this for many, many years. The first time I actually sat down and really went, Okay, I need to determine what is this wage for me. My accountant got me to do what he referred to as wait for it, a lifestyle budget. He went, ‘Okay, based on the lifestyle that you want to run, how much money should you pay yourself. And a lifestyle budget is just a fancy word for a budget. How much does it cost to run my family, to pay my bills to live the life that I want to live? He encouraged me to do that every year. To go, okay, just like you need to work out a budget for your business for the next 12 months, what is your budget for your life, Gerda, for the next 12 months? What does that look like? 

I actually like that approach, because the budget means that I don't have an unlimited pot of money, because who does? Maybe the rich and famous do, but not us mere immortals, we don't have a pot of gold. There isn't an infinite amount of money available to us, so we have to budget. We need to make every dollar stretch, whether that's in your personal life or in your business. So as a family, we also need to budget in terms of, what is it that we want to do? Do we want to travel this year or not?  Like my family, we don't do a lot of traveling overseas or anything. It is not something that we really want to do, but we like a good motor biking weekend. Our son goes to boarding school, that's quite a lot of money there, so each family is different. So based on what it is that you want for your family over the next 12 months, what do you need to come in. How much income is your partner or your spouse contributing? And so for me personally, I pay myself a set wage every week. I get paid on a Wednesday. It's like, yay, money's coming in. 

An interesting fact is that I've not given myself an increase for the last five years. So for the last five years I've earned the same amount of money. And you might go, well, that's just crazy Gerda because costs have gone up and that type of stuff. But you know, I'm just being honest here in that, I earn a good wage. I'm very happy with my wage. I believe in living within my means. My husband has got a full-time job. He contributes to the family. So it's like, if the budget is the budget, the budget is the budget, right? I don't need more, and I am also investing into my businesses as I go. This year, particularly, I'm doing a lot of investment into The Psych Professionals, the actual group private practice. I'm always investing in my own learning in so that I can serve private practice owners better as part of PPS Australia. And it's like, it's been fine, but it really requires you to every year go, okay, what do I need? If I don't need more, I'm good. and I get excited about being able to invest in my business. 

Being a business owner is who I am, but it's at the core of it, it's about expanding my impact as an allied health professional. Expanding my impact as a psychologist. Like last year, we started our Agnes Water location. There are some interesting things happening in Brisbane at the moment that I can't share just yet for the practice over there, but that requires financial investment. So yes, there is that sacrifice, a lot of business owners might go, well, that's not happening. I'm going to give myself an increase, or my team members are getting increases. So I'm sharing this in terms of going, it doesn't have to be this or that, it can be and. You can earn a decent wage and still grow your business. It is when people make martyrs of themselves, I've got a problem with that because when you do that, you don't pay yourself properly. I know it's not sustainable, and I've seen firsthand the fallout, and the burnout that occurs when practice owners don't look after themselves.

Yes, you must certainly need to look after your team as well. But again, it doesn't have to be either or. It can be and. We can do this together with our team, we are not going to be that business owner that drives a Lambo and the team rocks up at work with a 2002 model car. That's not who we are. And stop being scared that that's how you're going to be perceived just because you pay yourself a living wage. Alright. So, yeah, I hope this has given you some food for thought. I'm going to stop going on about this because I feel so passionate about this. So have a think and really reflect on it. As always, feel free to reach out to me, just go into the show notes, my email addresses in there. Flick me an email and tell me what this has brought up for you. Let me know if I can help, It's what I do. I am here to make sure that you as the practice owner get to build a sustainable business. A sustainable business that looks after you, looks after your team, so that together you can look after the clients and your community.

Thank you so very much for tuning in, and as always, remember that I am here to help you build a practice you can't stop smiling about.  😊

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Gerda Muller

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