How to Become a Private Practice Therapist

You became a therapist because you want to help people overcome challenges and live the lives they want. You want to help clients address mental health concerns, but you need a new way.

Maybe you’re experiencing burnout after working with an agency, school, or hospital. Perhaps you want the freedom to be your own boss and make your schedule meet your needs. Whatever your reason for starting a private practice, our coaching and consulting services can help you build a successful practice faster than you would on your own.

Becoming a business owner requires a different skill set than working as an employee for an agency. This new adventure requires a mindset shift from employee to owner and a willingness to put in hours of hard work at the beginning. All the decision-making and organization can feel overwhelming. Read on to learn more about starting a private practice and how our services can help.

Why Do Therapists Go Into Private Practice?

Therapists start a private practice for many reasons, but the bottom line is freedom. Many clinicians want more freedom in treatment options for their clients and more control over caseload and their own schedules. Building a successful private practice requires hours of hard work- especially during the first year, because most counselors establish their private practice while continuing to work for an agency.

How Much Do Most Solo Practice Therapists Make?

The average salary of a marriage and family therapist in 2021 was $49,880, which considers those working in agencies and self-employment. But, the mental health industry is seeing a boom, and there’s never been a better time to start your solo therapy practice. The need for quality mental health care is growing in our society, and your practice can help fill that need.

How much money you make as a private practice therapist depends on several factors:

  • Your business plan includes overhead costs like rent for office space, your health insurance costs, and licensing fees.
  • How many hours you’re able to work each week. Be honest about your availability – you’ll need time for everyone in your caseload and time to build your business.
  • Your rates. If you’re paneling with insurance companies, they typically tell you how much you’re able to charge per visit and how often you can see a client.
  • If you decide on private-pay or accept insurance reimbursement rates. Some therapists opt to be private pay to avoid the need for insurance paneling and billing. Private pay therapists can have a set hourly rate, offer package discounts, or work on a sliding fee schedule based on a client’s income.

How Many Hours Do Most Therapists Work in Private Practice?

Many social workers, psychotherapists, and LMFTs who work for agencies have their hours set by an employer. Transitioning from an employee mindset to a business owner mindset can be overwhelming and time-consuming, so setting realistic boundaries around your available time is essential. If you are working part-time at first because you’re continuing to work for an agency or employer, it may take longer to get established, but you can still accomplish your goals.

When deciding how many hours you’ll need to work, consider the number of clients you can take on, how many hours you’ll need for paperwork (notes, reports, insurance) and how many hours you’ll need to build your business. The business side of a private practice includes everything from billing insurance to marketing.

What Are the Benefits of Private Practice?

The benefits of opening a solo practice are plentiful, especially if you have an entrepreneurial mindset. Working full-time for an agency as a mental health professional can mean long hours, little control over treatment options, and limited scope of impact. You may also wind up with a caseload that pushes you toward burnout.

You get to make your own schedule in private practice, decide who your ideal clients are and tailor your services to whatever mental health niche you wish. As a private practitioner, you may choose to work with substance use disorder, domestic violence, anxiety, depression, PTSD, family issues, or mood disorders, among other options.

Your ideal clients may be women, teenagers, men, children, people with developmental disabilities, chronic illnesses, entrepreneurs, or any other subset of the population. When you’re your own boss, you choose who to treat and what to treat.

While your revenue is directly tied to the number of clients you see, you get to choose your ideal caseload as a mental health business owner. You get to set your caseload based on your ideal schedule, how many clients you want to work with at a given time, and how much money you want to make in your private practice.

Many therapists consider thirty clients a week to be a full case-load when accounting for notes and billing time. However, when running your own business, there are other tasks such as marketing, credentialing, etc. When crafting your ideal schedule, you should also consider the extra energy investment if you plan to see groups, families, or couples.

What Are the Disadvantages of Starting a Solo Practice?

Starting a solo practice is a huge career decision, so it’s essential to consider all the disadvantages of being a business owner before you leap. When you’re both the owner and the therapist in your solo practice, all day-to-day tasks fall on your shoulders. Here are some disadvantages of starting a solo practice to make the best career decision for yourself.

  • Many therapists don’t want to become “business owners” and think about profit. But, to run a successful private practice, you have to think about your revenue – not just about helping people. Our consulting services walk you through how to think about income while still supporting the clients you so badly want to work with.
  • The time involved in setting up systems and processes for insurance billing, client notes, marketing, etc., can be significant. If you don’t have the time to invest, now might not be the best time to set up a practice. The good news is that with the right guidance from a business coach who has been where you are now, you can set up a plan that works even if your current schedule is limited.

Turning people away because your calendar is full is something you’ll need to do once your practice is set up. Your caseload will fill up, and many therapists have difficulty sticking to their boundaries about caseload and time spent on business. It’s easy for your business to take over other parts of your life. Our consulting services will teach you how to set appropriate work-life boundaries to achieve the business success and personal life you want. We can also guide you in starting a group practice if you want to increase your caseload.

Decision-Making for Private Practice Therapists

Starting a private therapy practice involves a lot of decisions. All you’ll need to do is make the best decision at each moment. Talking with other therapists can help you make some of these decisions. Hiring a business coach will ensure you have the tools to make the right decisions combined with accountability to move through this process to have more control over your schedule, career, and life.

As you build your business and reflect on your level of success, you’ll likely change some of your early business decisions. Changing your direction is a normal part of building a business – it’s how businesses grow. To begin, you’ll need to make some decisions about:

Who is Your ideal client?

Answering this question will allow you to create a private practice tailored to your client’s needs, help you specialize and avoid overwhelm, and give you direction for further career growth and credentialing.

Insurance Vs. Self-pay for Therapists

Taking insurance can make it easier to fill your caseload but may limit how much you can charge, and submitting insurance claims can be time-consuming. For more on the benefits of insurance Vs. self-pay for therapists, click here.

If you choose to take insurance – which companies do you want to panel with? Each insurance company has its own paneling process. Making intelligent decisions about which ones to put time and energy into will help you avoid unnecessary labor.

Will you take care of your back-office work or hire an assistant or office manager? Many mental health professionals start their private practice taking care of the business side of things themselves but move to hire help once their practice is profitable. If you think you want to hire office staff for your solo practice, it’s good to know what tasks you’d like them to take on to determine how much you’ll need to pay them.

What sort of private practice marketing will you use? If you panel with insurance companies, you’ll get many referrals through their system, but you may not want to rely on that exclusively. You’ll need to consider using Psychology Today, building your own website, social media, etc.

What sort of liability insurance do you need to protect you and your business? You’ll want malpractice insurance to protect against legal actions or claims and licensing board complaints. The coverage type and amount you choose depend on your business plan.

Starting a Solo Practice Doesn’t Mean You Have To Work Alone

Many solo mental health practice owners collaborate to share ideas and struggles and hold each other accountable. Joining professional organizations and attending conferences are wonderful ways to build a network. Still, even then, you want someone who knows your business plan, encourages you, holds you accountable for your action steps, and ensures you build the most successful private practice you can.

Soribel Martinez, LCSW, is a psychotherapist with over 20 years of experience in the mental health field. She opened her private practice, SMPsychotherapy, in 2018.  She scaled the business to include over thirteen practitioners and covers clients in Connecticut and New York.

Now, Soribel is bringing her knowledge of the mental health field and her business savvy to her coaching and consulting clients. Soribel works with therapists, counselors, and social workers who want to start a private or group practice so they can create a business that speaks to their passions. Her clients are grabbing hold of their own schedules, building client lists, and setting up processes to ensure they are successful as private practice therapists.

Reach out today to schedule your FREE Business Consultation Call to learn more about Soribel’s business coaching services. She’ll learn more about your current business, your goals for scaling your practice and provide her recommendations for your next steps.

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