How to Start a Private Practice the Right Way – 8 Simple Steps

Ready to Start a Private Practice?

With the right grit and determination, anyone can start a private practice, but you have to have a plan, and you have to get help from people who’ve done it before. In this article, I’m sharing with you my 8 simple steps for starting a private practice the right way…and my list may surprise you!

1. Be honest with yourself.

Too many private practitioners start their business without really considering what it means to be a business owner. Start by considering the following questions:

 

-Are you confident in your clinical skills?

-Are you comfortable seeing clients in a private setting where you may be the only one in your office or building?

-Do you have a clear idea of what kind of clients you most enjoy working with?

-Do your state’s laws and regulations allow you to be in private practice with your current license type?

-Do you have any current debt that you need to pay off first?

-Are you prepared to potentially face added liability and stress?

-Are you pretty good with handling money?

-How will you finance your new business?

 

If just reading these questions gives you pause (and/or palpitations…), you might want to consider at least spending more time in “contemplation mode” before you dive in and actually start your private practice.

 

Or if, on the other hand, you feel relatively ready to answer these initial questions for yourself, or feel relatively ready to get the help you need with these questions, then you’re probably in a fairly good position to move forward in actually starting a private practice.

 

Hint: I highly recommend you also loop in your husband, wife, partner, or other significant people as early as possible, as you becoming a business owner will without a doubt have an impact on them, and it really helps to have them on the same page as you.

 

Ok, so, if you felt completely panicked by these questions, were overwhelmed with fear and doubt, you may consider avoiding private practice altogether and joining a group practice, agency, college counseling center, etc. There’s absolutely nothing wrong with that.

 

2. Find some money, or be willing to hustle.

Fortunately, a counselor or mental health private practice is actually one of the most affordable businesses you can start. You need relatively few things to open your doors: things like malpractice insurance, a way to collect money, a website, a way to keep clinical notes, and a place to meet your clients (or just a computer, if your practice is entirely online).

Think of it this way: many small businesses, like restaurants, for example, often have to take business loans of $100,000 or greater just to get started. They have to pay for things like: kitchen equipment, initial stock and inventory, uniforms, insurance, training for staff, franchising fees, and the list goes on.

You, on the other hand, really don’t need much to get started with your private practice.

I already listed a few things you’ll need to get started, but let’s look at a hypothetical breakdown of these costs a little closer:

  1. Malpractice insurance. This is non-negotiable…you need to cover your clinical risk, if you aren’t already. I use HPSO insurance for this and pay less than $137 for the entire year.
  2. A way to collect money. You’ve got pretty much 3 ways to do this: check, cash, or credit card. A possible fourth would be accepting clients’ HSA (Health Savings Account) cards, or something comparable. Yes, you could only accept cash or check, and this may be ok in the beginning…but, in essence, it’s the modern era and therapists in private practice need to be accepting credit cards, despite our resistance to paying the 3%ish fees associated. A quick fix for dealing with those fees? After you set your counseling rates, simply add 3% to that number and charge all clients that fee, even if they pay via check or cash. Still not convinced? See another one of my articles on why you should accept credit cards in private practice. In terms of actual options for accepting credit card, I think it’s best to accept (and store, in the case of cancellations) credit cards securely via your EHR (Electronic Healthcare Records) software. Speaking of which…
  3. Something to keep clinical notes with. You could take notes on pen and paper when you’re getting started, and many therapists do. This might work for the first few months, depending on how busy you are. But a time will soon come that this method is simply not sustainable, scalable, or smart. A lot of therapists try to save money by not purchasing an EHR or practice management software early on, but I think this is one cost that you should absolutely take on at the very beginning of your practice. It will save you a LOT of headaches (and potentially liability in terms of keeping client information secure, etc.). Not to mention, most EHRs offer a free trial. With a good EHR, you can automate and streamline critical features of your practice like your client intake paperwork, client notes, insurance billing, superbills, credit card payments, online scheduling, online video sessions, and more. My EHR of choice is, and has always been SimplePractice. You can get a free 30 day trial of SimplePractice here.
  4. You need a website. This should be an obvious one, too. Eventually, you’ll want clients to be able to find you online consistently, but for now, you at least want a simple, clean, easy-to-use website where clients who find out about you offline can look you up online. If you’re comfortable with techy stuff, I recommend grabbing web hosting with Bluehost and then installing WordPress.org (not WordPress.com, which is a paid option of WordPress, whereas WordPress.org is free). This combo will save you money in the long run and provide opportunity for endless customization. If, on the other hand, you want a simpler all-in-one platform and plenty of support, I highly recommend Squarespace. Either option is great for therapists, though I recommend steering clear of less reputable options like Weebly and Wix.
  5. You need a place to meet your clients. Although some therapists open up their private practice using online sessions only via a HIPAA-compliant software like SimplePractice, VSee, etc., meeting clients in their home or community, etc., I recommend that therapists in general rent (actually, sublease) an office to get started. This separates personal life and professional life and conveys more professionalism than the first-mentioned options. Of course you’ll also need a phone number where clients can reach you (should be for scheduling purposes only), and for that I highly recommend Grasshopper because it’s affordable, easy to use, and you can quickly get set up with a phone number that has an area code of your choosing. Get a free 7 day trial of Grasshopper when you use this special link.

 

Obviously, you’ll also want to setup things like an LLC, get on insurance panels if you desire, set up a phone number, etc., but this short list I’ve provided will help you kickstart your process.

 

3. Be ok with being new at something (same as becoming a therapist).

Remember when you saw a “real” therapy client, for a “real” therapy session, for the very first time? I do. I got a bloody nose halfway through and spent the rest of the session with toilet paper hanging out of it. I also remember what it was like to be SO new at something, to be in a completely new role and identity. The same will apply to your role and identity as a business owner. You’ll be tasked with things you’ve never done before and feel very unprepared to tackle. You’ll learn new terminology, new laws and regulations, you’ll have to learn about finances and numbers, and you’ll have to learn how to use technology, just to name a few. Your ability to deal with these feelings of overwhelm and at times, incompetence, will have everything to do with your ability to be successful in private practice.

 

4. Set clear and lofty goals.

Shoot for the moon and you’ll land on the stars, right? Or something cheesy like that…

When starting your private practice, I suggest that you set clear AND lofty goals…in other words, aim higher than what you think is possible. For instance, if your first *clear* goal is to generate $100,000 in annual gross revenue, then bump that goal to $120,000 in annual gross revenue, and work your goals, action steps, and even your fees backward from there. You’ll find that when you have bigger goals, you unconsciously work harder and smarter to actually achieve them. If you reach your goals quickly and easily, your goals are too small.

5. Find a mentor or guide.

I’m a business consultant for therapists in private practice so I’m biased, right? Probably so, but I can tell you that working with my own business consultant and coaches over the years has exponentially accelerated my growth and my income. You will work through blocks and challenges a LOT faster (and with less stress, headache, and money spent) when you work with someone knowledgeable who’s been through it before.

6. Get clear on your value.

Speaking of fees, a mistake that I see therapists committing all too often is charging far too little for their therapy session fees. When you set your fees two low, at least two things happen: clients undervalue their work with you (and therefore work less hard, show up late, and cancel more often), and you can’t comfortably pay your bills. To determine your private practice fees, simply set your gross revenue goal and work backward from there. For example:

 

$100,000 gross revenue goal

Add 30% for expenses and taxes, roughly.

$130,000 divided by how many weeks per year you want to work (let’s say 48)

 

$130,000 / 48 = $2,708.33 generated per week.

 

Divide that number by how many clients you want to see each week.

 

$2,708.33 / 15 = $180.55

 

So, your fee should be exactly $180.55, if not more, in order to generate your gross income goal of $130,000 annually. See how I did that?

 

Want more help with this? Check out this video below:

 

7. Market first, then grow.

I’ve worked with over 400 therapists in private practice at this point, and the number 1 challenge for therapists remains: getting new clients consistently.

Knowing that, you should start marketing yourself at least 3-4 weeks before you’re actually ready to take on clients. If you have more time to start marketing, then I recommend you start your website early on and getting ranking on Google ASAP (this takes at least 3-6 months to generate organic traffic). Work on setting up reliable sources of clients, and do it the right way from the start:

 

 

8. Grow with your business, not ahead of it.

The second most common mistake I see therapists in private practice making is trying to grow too fast, too soon. In other words, taking on too many expenses before they have enough revenue to pay their overhead and pay themselves. The solution for this is simple: grow your business (aka your expenses) along with your revenue, never the other way around.

 

Starting a private practice can be hard, but it doesn’t have to be, and you don’t have to do it alone. Get help growing and accelerating your private practice here:

https://www.privatepracticeworkshop.com/workwithme/

 

Until then, good luck and godspeed!

John

 

About John: John Clarke, MA, EdS, LPCC, LPC is a Licensed Professional Counselor, entrepreneur and private practice consultant. He has started and grown 5 businesses since 2013, including his group counseling practice that he sold in April 2019. He’s also a drummer, Muay Thai martial arts practitioner and enthusiast, and currently lives in Paris, France for his wife’s job. He loves helping therapists get more clients and grow a better business.

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