Starting a Private Therapy Practice

You’ve decided to start your private therapy practice! All you need is a space to meet with clients and a few sessions booked, right? It’s not easy to create a private practice. Like any business setting up a private mental health practice involves loads of decision-making, a bit of careful consideration, and a pile of double-checking to ensure your practice’s success.

While providers working in their solo mental health practice have more control over caseload, schedule, and work-life balance, they also shoulder 100% of the responsibility of running a business. The weight of that responsibility can feel overwhelming. All decision-making requires you to switch from therapist mode to business-owner mode, which is a mindset shift many providers struggle with.

If you’re wondering how to start a private therapy practice, keep reading. This comprehensive guide can help you create an action plan to propel you through the set-up stages to develop a practice that furthers your mission of providing quality mental health care while ensuring you can support yourself and your family.

What are some expenses I’ll have as a private practice therapist?

One of the most significant drawbacks of starting your own practice is keeping up with the expenses. Early on, your private practice may not turn a profit because you’re responsible for ensuring your practice has everything it needs to run smoothly. Here are some expenses to consider when setting up your practice.

  • Your personal health insurance, business insurance, malpractice insurance, etc.
  • Accounting software or an accountant for monthly tracking and tax preparation.
  • Invoicing software and systems for private pay clients and insurance billing.
  • Website design, building, content creation, and hosting.
  • An Electronic health record system/patient management system.
  • An email address and web forms that are HIPAA compliant.
  • Marketing costs include advertising, SEO, copywriting, etc.
  • Legal fees for document creation, etc.
  • Networking memberships and conference fees.
  • Payroll costs and fees if you hire additional people such as office staff.
  • Rent if you need a space for in-person appointments.
  • Software costs.

What Are Some Steps I Need To Take To Set up a Private Practice?

Private practice management is a huge task, but with a detailed action plan and realistic expectations for completion, you’ll be able to complete each one on time and create the business and freedom you want. While you don’t have to complete every item before you start seeing clients, some of these items are non-negotiable. 

Create a Business Plan

The first step to setting up any business is to create a business plan. This business plan is a comprehensive document that you’ll continuously add to during the set-up phase. At a fundamental level, a business plan is a map from where you are now to the place of a successful private practice owner.

When you create a business plan, you’ll have to start with deciding how much time you have to dedicate to your new business. If you’re not working now, can you manage a full-time schedule? What part-time hours can you work if you are working for an agency or other company? Some of this time will be for working directly with clients. You’ll use the rest to build your business. Once you know how much time you’ll have here are some ways to allocate it. All of this information should be in your business plan.

Create a Mission and Vision To Guide Your Decision-making

A mission statement and vision are clear, concise statements that inspire you (and any employees) to move in the direction you intend. Even if your business is just you, having a clear path will keep you focused. When building your business, it’s easy to get derailed by attractive offers and enticing new additions. Running each decision you make through your mission, and vision statements can help you make decisions that advance your long-term goals.

Set Goals 

Goal Setting should align with your mission and vision and carry you through long- and short-term tasks. Goals should include things you want to accomplish right away and longer-term goals at the 3, 6, 9, and 12-month mark. It’s also a 5-year plan that encompasses your mission and vision.

  • Specific: rather than “I will fill my caseload,” try “I will serve 20 clients.” Being specific allows for better reflection on goal achievement and planning for the future.
  • Measurable: your goal should include a measurable outcome. In the statement “I will serve 20 clients,” adding “each week” makes it easier to measure success. If you’re only serving 15 clients a week but have 20 clients total, you’ve not met your goal yet.
  • Attainable: Your goal should fit into the time constraints without taking away from the time you need to complete back-office tasks. If you only have time for 15 clients a week when you account for office work and your personal life, set your goal accordingly!
  • Relevant: Your goals should relate directly to your mission and vision. If the goal doesn’t fit into your long-term plans – get rid of it! As a business owner, you don’t have time for distracting dribs and drabs.
  • Time-Based: Stating that you want to serve 20 clients a week is great – but in long-term planning, you want to set goals with an end date in mind to help you adjust marketing efforts, set up systems and processes, etc. “I will serve 20 clients a week within 6 months of opening my business” is a long-term goal that will allow you to track progress, adjust your efforts, and reflect as you go.

Choose a Niche / Specialty

Choosing your ideal client can help you target your marketing efforts. If you know who you’re trying to reach, a copywriter or ghostwriter can help you craft content to reach a specific population. Having a niche can also clarify your mission and vision, boost your chances of paneling with insurance companies, and help with creating business cards, letterhead templates, and your website.

Website Set-Up

Establishing yourself as a reputable mental health provider is easier if you create an authoritative presence on the Web. Your website doesn’t need to be complicated, but an attractive site that introduces you, what services you offer, and a blog where you share mental health tips can encourage people to reach out to you for therapy services.

When setting up a website, you’ll need to choose a hosting service like Wix, WordPress, or Squarespace. You’ll want to set your website up with search-engine optimization (SEO) in mind, so you show up when people search for therapy in your area. A web designer and copywriter team can help you set up a site. Hiring the right help can allow you to focus on the parts of your business you do best – meeting with clients!

Take Care of Legal and Insurance Requirements

As a private therapy practice, you’ll need to maintain your malpractice insurance, business license liability insurance, and more, depending on the regulations in your area. You’ll also need to establish yourself as an LLC or limited liability company, which will help to separate your personal and business assets. You’ll also need an understanding of tax requirements for your new business. Hiring a business lawyer to advise you may seem expensive but doing so can save you a lot of trouble and heartache.

Offer Services in an Office or Online, or Both?

Since the pandemic, virtual therapy is a go-to for many providers and clients. Sticking with online or phone-based treatment lowers your overhead costs because you don’t need an office space to conduct sessions. Many clients prefer the convenience and privacy of virtual therapy as well.

Some therapists, however, choose to offer in-office services. This allows you to charge higher fees, establish rapport with clients more quickly, and boost your website’s SEO. Some therapists decide to offer both in-person and virtual therapy appointments.

Will You Hire Staff or Start Alone?

Hiring an administrative assistant can save you incredible time with everything from scheduling appointments to interacting with your web designer. However, you may not have enough revenue to hire additional help when you’re just starting. Like any decision when starting your business, deciding to go it alone or hire help is something you can adjust as you go if you’re starting alone but want to hire an office manager; set that as a goal for six months or a year from now.

Will You Take Insurance or Private Pay Clients?

The decision to take insurance or accept private-pay clients is personal for each private practice therapist. Your choice will depend on your income goals, the type of therapy you offer, and your mission and vision.

Taking insurance will require you to accept the rates insurance companies set, which can lower your hourly rate. However, insurance paneling offers a built-in referral system since you’ll be a participating provider. Insurance companies will direct their clients to you for mental health services.

Accepting private-pay clients is an especially attractive option if insurance companies don’t traditionally cover your specialty or therapy methods. Specialties like sex therapy or custody mediation aren’t covered by insurance. If you offer services not covered by insurance alongside those that are, you may want to consider a hybrid approach where you accept insurance for some types of therapy and not for others.

Whatever type of payments you accept, you’ll want to establish a system for accepting credit card payments, checks, and insurance payments. Establishing a business checking account and business credit card will help collect fees and track expenses.

Have Clear Patient Policies

Before you start accepting patients, you’ll need clear policies for HIPAA compliance, cancellation fees, insurance claims, and copays. Hire an attorney to review these forms before use to ensure they meet all requirements. Having suitable patient forms prepared for your attorney to review can help keep legal costs down and expedite the process.

Create and Execute a Marketing Plan

While insurance companies you [anel with and other therapists you network with will provide referrals, you can’t rely on that as a permanent source of new clients. You can create a marketing plan that fits in your comfort zone and draws in enough business for you to meet your revenue goals. Here are a few ideas to get you started on a marketing plan:

  • Consider referral sources other than insurance companies, such as Psychology Today.
  • Many private therapy practice providers use social media to spread their message and gather leads. You can explore TikTok, Instagram, and Facebook as possible platforms.
  • Search Engine Optimization (SEO) is a long-term marketing strategy that will establish your credibility as a mental health professional, ensure potential clients can find you in a web search, and continue exposure to potential clients.
  • Create a system for handling phone calls, email, and social media requests for appointments.
  • Consider offering a free consultation call to meet with prospective clients, determine their needs, and determine if you are a good fit as a therapist.

Devise a System for Tracking Progress and Expenses

Working for an agency, you have to use the electronic health record system they choose, but as a private practice therapist, you get to choose the best system for your needs. Spend some time talking to others in your network or a business coach to determine which EHR fits best.

You’ll also need a system to track insurance claims and payments. When numerous clients tracking which claims are submitted, which are denied, and which are paid is a daunting task. Setting up an automated method for tracking insurance claims and payments may take time now, but it will save you time in the long run.

Continuing Education (CE) Requirements By State

Your state has specific guidelines for licensing requirements. When you work for an agency, you’ll likely get reminders about CE needs from supervisors. As a business owner, you’re responsible for tracking your CE needs and ensuring you meet them to avoid gaps in licensure. Calendar reminders are best for setting up a system, so you don’t forget.

Do Great Work

You don’t have to wait until you have everything set up before you start seeing clients. Once you have the basic forms and legal requirements, you can begin seeing clients as your schedule allows. Early on, many private practice owners are still working with an agency. If that’s the case, it’s a good idea to let your supervisors know you’re starting a private practice and take steps to ensure you aren’t causing a conflict. You must also avoid scheduling new clients for your private practice during your working hours for an agency. Remember, your current supervisors are likely good networking opportunities for your private practice.

If starting a private practice feels overwhelming, you aren’t alone. The transition from a salaried position with medical benefits, etc., to a life where your livelihood depends on the amount of effort and hours you put in causes anxiety for many. But, it’s also exciting.

Don’t Work Alone

Consider hiring a business coach or consultant to lower your anxiety, increase your efficacy, and reduce the amount of time it takes to move your practice from the preliminary stages to a successful endeavor. A business coach holds you accountable, ensures you meet self-imposed deadlines, and offers empathy and assistance when you need it most.

Soribel Martinez, LCSW 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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