How Much Should a Group Practice Owner Pay Themselves?

A Practical Guide Using The Practice Profit Blueprint™

As a group practice consultant, one of the hardest conversations I have with practice owners usually starts the same way. They lean in a little closer and quietly admit: "I haven't paid myself in three weeks." Or… "Everyone else got paid, so I skipped mine."

If you've ever done that, I want you to know something. You're not alone. In fact, I'd argue it's almost a rite of passage for many new group practice owners. I've also worked with established owners and even seven-figure practice owners who still struggle with paying themselves consistently.

When money feels tight, our instinct is to protect everyone else first. We make sure payroll clears. Rent gets paid. The electronic health record subscription renews. Our clinicians receive their paychecks on time. Then we look at what's left and tell ourselves, "I'll pay myself next pay period."

The problem is that the next pay period often looks exactly like the last one. Eventually, skipping your paycheck stops feeling like an exception and starts becoming your business model. That isn't sustainable. And trust me, I have learned this the hard way.

You didn't build a group practice to become the last person in line for a paycheck. You built it to create freedom, stability, and a business that supports your clients, your team, and your family. If you are not consistently paying yourself, the goal of freedom can quickly become a source of ongoing resentment. 

One of the biggest misconceptions I see is the belief that once a practice reaches a certain revenue milestone, paying yourself consistently will naturally become easier. Unfortunately, that's rarely what happens. I've consulted with practice owners generating $300,000 a year who felt financially secure because they had strong systems. I've also worked with seven-figure practice owners who still experienced anxiety every payroll cycle because they didn't.

Revenue solves very few financial problems if there isn't a system behind it. As your practice grows, so do your expenses. More clinicians. Additional office space. Payroll taxes. Benefits. Marketing. Administrative support. Software subscriptions. Without intentional systems, expenses expand right alongside revenue.

That's why simply making more money rarely solves the problem. Systems do. If you have the best systems in place, you will quickly find that you can not only pay yourself, but also pay your bills, and begin to increase your reserves. 

Over the years, I've learned something important. Skipping your paycheck usually isn't a math problem. It's an emotional one. It’s born out of a fear or trauma response. As therapists, most of us entered this profession because we genuinely care about helping others. We're natural caregivers.

When money becomes less fluid, our nervous system often responds by making sure everyone else feels safe before we do. We pay our clinicians. We pay our administrative staff. We pay the bills. Then we quietly decide we'll "figure it out." On the surface, that may look generous.

Underneath, it often reflects long-held beliefs about money, worthiness, responsibility, and success. Maybe you learned that taking care of yourself comes last. Maybe profitability feels uncomfortable. Maybe somewhere along the way, you internalized the belief that helping professionals shouldn't make too much money.

These beliefs often operate beneath our conscious awareness. They're not character flaws. They're patterns. As a Certified Financial Social Worker and a certified Trauma of Money professional, I've learned that financial decisions are rarely just about spreadsheets. They are often influenced by our subconscious beliefs, our nervous system, and the stories we've carried about money for years.

That's one of the reasons my consulting doesn't focus only on financial strategy. It also explores the relationship we have with money because sustainable profitability requires both healthy financial systems and healthy financial beliefs.

One of the most influential business books I've ever read was Profit First by Mike Michalowicz. It completely changed the way I thought about cash flow. Over the years, as I continued growing my own group practice and consulting with practice owners across the country, I realized therapy practices have unique financial challenges that aren't always addressed in traditional business models.

So I adapted those principles into what I now call The Practice Profit Blueprint™. The Practice Profit Blueprint™ is a financial operating system designed specifically for group practice owners. Its purpose is simple: Every dollar entering your business should already have a job before you spend it. When your money has a purpose, financial decisions become much less stressful.

Here's exactly how I organize the cash flow in my own practice:

Incoming Account

Every payment enters one incoming account. This allows me to clearly see cash flow before allocating money where it belongs. I also don’t use an operating expense account, because it just became too complicated for me. So everything comes in and out of the incoming account. 

Approximately 70% is transferred into the account used for payroll expenses. I transfer this money into the payroll account the day before my clinicians are paid. Which is typically twice a month (unless it’s a 3-pay period month). Keep in mind that this number is an approximation. If my group’s billing numbers are down, we may need to increase that percentage to cover payroll expenses. We may also need to increase it if there is a holiday, if there are three pay periods that month, or if a significant number of clinicians are out using PTO.  This helps me quickly understand what the business can comfortably support without borrowing from other priorities.

Every two weeks (on the same day I transfer the money into the payroll account), 10% is transferred into my Owner Compensation account. This is how I pay myself a consistent salary. Personally, I prefer paying myself a predictable salary rather than wondering what I can afford to take each month. My mortgage doesn't change because referrals slow down. Neither do groceries nor retirement contributions. Consistency creates stability.

Every two weeks (again at the same cadence as the other transfers), I transfer 5% into a dedicated tax account. Tax season shouldn't feel like an emergency. When taxes are set aside consistently, there are far fewer surprises. This is where the money comes from to be able to make your quarterly tax payments effortlessly. 

Another 6% is allocated to a Profit Share account. Healthy businesses should generate profit. Revenue is exciting. Profit is what creates long-term sustainability. It may make sense to coordinate with your leadership team to earmark the profit money for specific things. Maybe that is a year-end bonus for all leadership members. Maybe it’s opening a new location. Or maybe it’s investing in a staff-wide training program. 

One account I added that isn't part of the traditional Profit First model is what I call my Safety Net account. Every two weeks, another 5% is transferred into reserves. This account has become one of my favorites. Insurance reimbursements get delayed. Unexpected expenses happen. Economic conditions shift. Knowing those reserves are there allows me to respond thoughtfully instead of reacting from fear.

One of the most common questions I receive is whether practice owners should take owner's draws, distributions, or a salary. The answer depends on your business structure and should always be discussed with your CPA. Many owners choose a combination of salary and distributions. Personally, I prefer paying myself a consistent salary. Predictability reduces stress. Instead of wondering what I can afford each month, I know exactly what my paycheck will be. That allows me to budget personally while leading my business with greater confidence.

Let’s be honest here for a moment. If your practice is struggling financially AND you are not paying yourself consistently. That’s a recipe for disaster. There is only so much financial strain and pressure one person can tolerate. If you have unyielding financial pressure and stress at home and in your business, it’s going to contribute to resentment and burnout. 

If your practice is structured as an S Corporation, you've likely heard the phrase reasonable compensation. Generally speaking, if you're actively working in your practice, the IRS expects you to pay yourself a reasonable salary. One question I encourage owners to ask themselves is:

If I hired someone else to do everything I currently do as the CEO of this practice, what would I have to pay them? That question often provides a healthier starting point than simply paying yourself whatever happens to be left over. Always work with a knowledgeable CPA to determine what reasonable compensation looks like for your unique business.

One of the most common beliefs I hear is: "Once I make more money, I'll finally start paying myself consistently." Unfortunately, that almost never happens. The habits you build at $300,000 usually follow you to $1 million. More revenue without better systems often creates more complexity, not less stress.

You don't need to implement everything perfectly tomorrow. Start by opening one additional account. Begin setting aside money intentionally. Pay yourself consistently, even if the amount is smaller than you'd like today. Healthy financial habits grow over time.

Your clinicians deserve to be paid. Your administrative team deserves to be paid. Your vendors deserve to be paid. But so do you. Creating a financially sustainable practice isn't selfish. It's responsible leadership. When practice owners experience less financial stress, they make better decisions.

They become stronger leaders. They model healthy boundaries. They build businesses that can continue serving their communities for years to come. That's exactly why I created The Practice Profit Blueprint™.

It's more than a cash flow system. It's a framework for building a profitable practice while creating a healthier relationship with money. Because when you change both your financial systems and your subconscious beliefs about money, everything begins to feel different.

Building a successful group practice isn't just about increasing revenue. It's about creating systems that allow your business to consistently support your clients, your team, and you.

The Practice Profit Blueprint™ is the same financial framework I teach through my consulting, coaching, speaking engagements, and continuing education trainings. Whether you're launching your first group practice or leading a seven-figure organization, I'll help you build practical financial systems that reduce stress, improve profitability, and create predictable owner compensation.

Your practice deserves a healthy financial foundation.

Your team deserves strong leadership.

And you deserve to be paid for the business you've worked so hard to build.

That's the heart of The Practice Profit Blueprint™. Download your copy today and begin building the practice that pays you consistently.