The ABA industry is growing fast, but that doesn’t mean all ABA businesses are healthy.
Plenty of owners have full caseloads and constant referrals, yet still lie awake wondering how they’re going to make payroll, pass an audit, or keep staff from leaving.
Good clinical work is the price of entry. On its own, it doesn’t protect from bad contracts, sloppy billing, or nonstop turnover. When ABA practices wobble or fail, the root causes usually fall into four areas: people, compliance, money, and growth.
Let’s take a better look at these four pivotal factors to see where some ABA practices fall short, and how stronger practices do things differently.
- Team Performance: Retaining the Right People
Staffing is usually the primary constraint in an ABA practice. When turnover is high, you lose more than headcount. You lose supervision capacity, continuity for families, and any chance at a predictable schedule. Under pressure, owners hire whoever is available and watch quality and morale erode.
David “Schatzy” Schatzkamer, who works with new and growing ABA practices, sees the same pattern repeatedly:
“Having the right people in the right positions is crucial. Don’t wing it. If you don’t have the right people and processes in place, at the end of the day, you’re inviting chaos.”
In day-to-day operations, that “chaos” looks like last-minute cancellations, plans not implemented as written, supervisors spending most of their time putting out fires, and parents quietly looking for another provider. Over time, it turns into complaints, negative reviews, audit findings, and stalled growth.
Getting out of that pattern is mostly about doing the basics consistently. Roles need to be defined clearly—BCBA, RBT, scheduling, billing—so work is assigned purposefully rather than by default. Turnover and vacancy times should be tracked so you can see when a position is a chronic problem rather than an isolated event. Professional development needs to be tangible: real supervision, meaningful CEU support, and a visible path forward. Burnout must be managed with clear expectations around caseload and travel, not only with “thank you” messages. And someone must own the HR function: onboarding, credential tracking, performance reviews, and the difficult conversations that keep standards real.
If the team is not stable, nothing else will be stable. Better systems and reports can help, but they cannot compensate for a revolving door.
- Compliance & Risk Management: Reducing Avoidable Headaches
Compliance problems in ABA rarely arrive as one big event. They accumulate quietly in the background: licenses that expired last month, plans that weren’t updated on time, progress notes that don’t match what was billed, and consents or signatures that no one can access quickly.
Any one of these can delay payment or trigger recoupments. Taken together, they give payers and regulators a reason to look more closely.
Charlene Kurth is COO of Office Puzzle, a platform many ABA practices use for documentation, scheduling, and billing. She sees a common root cause:
“Many teams juggle multiple systems or rely on manual processes, which makes for errors and gaps in information. We see clinicians spending too much time on paperwork; it’s become a persistent challenge across the industry.”
The goal is not more forms; it’s fewer surprises.
In practice, that means having one reliable way to track licenses, certifications, and renewal dates, with clear responsibility for keeping them current. It means setting specific expectations for documentation— what belongs in each note, how soon it must be completed, and what happens when it isn’t—and enforcing those standards consistently. It means using HIPAA-compliant systems for scheduling, notes, billing, and data storage, rather than relying on personal email accounts or scattered spreadsheets that are hard to defend under scrutiny.
It also means doing some internal review before a payer or regulator does it for you: periodic chart reviews, pre-billing checks, and spot audits on high-risk items like time overlaps and units billed. Some practices run everything through a single platform like Office Puzzle; others use a set of tools that work together. The specific stack matters less than the answer to a simple question:
If a payer or regulator showed up tomorrow and asked you to show what you did, why you did it, and why you billed for it, could you pull that together quickly, without panic?
If the honest answer is “not really,” the issue isn’t only paperwork- it is unresolved compliance risk.
- Financial Management: Turning Activity into Cash
Most ABA practices don’t struggle because they have a lack of demand. They struggle because they don’t convert that demand into cash at the right speed and margin.
Common problems include not delivering all the hours that have been authorized, billing that is late or inconsistent, and a lack of clarity around which services, locations, or contracts are profitable.
Schatzy puts it very plainly:
“When a client gets approved for six hours of services, and you’re only delivering three, that’s a real problem. Billing’s already tight while you wait on reimbursements, and all of it just squeezes your cash flow — the same cash you need to make payroll.”
Those missing hours are not abstract. They represent lost revenue, slower client progress, and often deeper scheduling or staffing issues.
On top of that, many owners start with DIY accounting or ask an office manager to handle the books “when there’s time.” That may work early on, but as the practice grows, it often leads to financial reports that are incomplete, late, or both. By the time a cash crunch is obvious, the range of options is less than ideal.
A more durable approach is to treat the numbers as instruments, not tax inputs. A few metrics tend to matter across practices:
- Revenue per billable hour shows whether you are fully realizing the value of the hours you are authorized for, at your contracted rates.
- Gross margin, often targeted around 30–40%, shows what is left after direct labor and related costs to cover everything else and still produce a surplus.
- EBITDA, commonly in the 10–20% range for a healthy operation, shows whether the core business is profitable before owner-specific items and financing. Staff utilization, often in the 70–85% range, shows how much of clinicians’ time is truly billable versus being absorbed by travel, admin, or gaps in scheduling.
- Denial rates and A/R collection time show whether you are getting paid what you bill and how long that cash is tied up.
None of these numbers have to be perfect, but they do have to be consistent, timely, and visible.
Whether you manage this in-house or with accountants who understand ABA, some basics don’t change: close the books on a regular schedule, review the same set of KPIs every month, and treat large swings as red flags to investigate, not as background noise. If you find yourself surprised by your own cash position more than once, the financial system is not doing its job.
- Growth & Business Strategy: Expanding Without Breaking the System
“Growth” sounds positive. In practice, adding clients, services, locations, or payers puts pressure on the same three key factors:- staff, systems, and cash. If these are not strong, growth tends to magnify existing issues instead of solving them.
Before saying yes to the next opportunity, it helps to ask a few direct questions:
- Who are you genuinely well-positioned to serve? Age, diagnosis, intensity of need, setting, and geography all matter. A practice that tries to be “for everyone” often ends up stretched thin where it matters most.
- Which payers and contracts are worth it? Low reimbursement combined with a heavy administrative burden can be a losing proposition, even if the volume looks attractive on paper. Some contracts are better declined than accepted.
- Where do referrals really come from? In many markets, pediatricians, schools, and parent networks drive more volume than advertising. Relationships and reputation often matter more than marketing efforts.
Some practices grow by acquiring other clinics; others build one location at a time. In both cases, a concentrated payer mix—with only a few payers dominating the book of business—creates risk if rates or rules change. New services and new locations also consume cash before they contribute meaningfully to the bottom line. If the existing operation isn’t consistently profitable and reasonably predictable, expansion tends to accelerate financial strain.
A more disciplined sequence is to stabilize one site first, with staffing and compliance under control, and financials you trust. Then use that site’s real data to model what it will cost and how long it will take for a second or third site to reach breakeven. Finally, pressure-test your systems: scheduling, billing, supervision, and reporting should be able to handle a significant increase in volume without turning into a series of manual workarounds.
Telehealth and home-based care follow the same logic. They can solve problems with accessibility and travel, but they introduce their own supervision, logistics, and technology challenges. The core question doesn’t change: do you have the people, systems, and cash to add this element to your practice without destabilizing what already works? If the answer is “not yet,” the work at hand is to strengthen the practice’s core, not push harder towards growth.
Pulling It Together
Seen through these four lenses—people, compliance, money, and growth—the solvency of an ABA practice becomes easier to assess honestly.
If your calendar is full but staff are exhausted and frequently thinking about leaving, the main issue is people. If you dread a provider audit on your documentation, the issue is compliance. If the only time you see a clear picture of your numbers is in tax season, the issue is financial visibility. If “growth” mainly shows up as more stress on the same leadership team, the issue is strategy and capacity.
There is no single perfect model. But the practices that stay healthy over the long term tend to share a few habits: they look at these areas regularly, they are willing to see what is actually happening in their own operations, and address problems when they are still small, instead of waiting for them to become existential.
This material has been prepared for informational purposes only, and is not intended to provide or be relied upon for legal or tax advice. If you have any specific legal or tax questions regarding this content or related issues, please consult with your professional legal or tax advisor.
