Most of us didn't study psychology or social work in order to become entrepreneurs. And in fact, many of whom have been fortunate enough to successfully scale a large group practice may not have preemptively made business plans. It sort of happened, organically.
But that doesn't have to be the case for everyone. And even for those of us who have scaled, we may still be underleveraging existing team members or have failed to hire the right ones. We need to make sure we know what we want the bus to look like, what seats we need, and make sure we have the right people not just on our bus, but in those "right" seats.
For those just starting, when you transition from solo practice to building a group, you're no longer just a clinician. You're a business owner. And business owners need infrastructure. You need financial, legal, and operational structure and processes. You can benefit by planning for this before you need more clinicians.
I learned this the hard way. When I founded New York Behavioral Health, I hired clinical staff first. It felt natural; I'm a therapist, so I built around what I knew: providing the best care to as many clients as possible, hiring the right people, educating and supervising, and building staff who could provide high quality evidence-based care. But within a short time, I realized our financial systems weren't structured efficiently, our contracts could be improved, and I was carrying financial and legal risk I didn't fully understand. That is an understatement. I should have had an attorney and accountant in place during the first three months, ideally before I hired a single clinician.
Since then, I've consulted with dozens of growing practices. The ones that scale smoothly have one thing in common: they hired the right advisors first, then built clinical teams on top of solid infrastructure. The ones that struggle? They built the plane while flying it. And it's still under construction.
Here's what might work better.
The non-negotiable foundation (months 1-3)
1. Hire a CPA or accounting firm familiar with behavioral health
This is your first hire.
A great accountant does more than file taxes. They help you choose the right business structure (S-corp vs. LLC matters for tax planning), model profitability before you hire anyone, set up financial systems that scale, and ensure you're not leaving money on the table through poor tax strategy. What kind of business model will work best for you financially, ethically, and clinically? What should your margins be, expenses, projected budgets, reinvestment, benefit offerings, tax strategies, rates, staff pay, payroll company, bookkeeping software, and so forth?
A good accountant will also want to know which practice management systems you use (/blog/ehr-practice-management-comparison), because clean data in your billing and scheduling tools is what makes financial modeling possible in the first place.
The difference between a good accountant and a great one is significant. A good one files your taxes. A great one helps you understand whether group practice profitability is actually viable given your market, your reimbursement mix, and your overhead. They run scenarios. They answer the hard question: "If I hire five clinicians at a 60/40 split, what's my actual margin?"
Based on my consulting observations with group practices, margins tend to be tighter than solo practice owners expect. Published financial data also illustrate why. Among group practices using fee splits, a 60/40 split was the most commonly reported arrangement in Heard's 2025 Financial State of Private Practice Report, accounting for 38% of reported splits (Heard, 2025).
Consider a group practice clinician generating $200,000 in annual collections. Under a 60/40 compensation arrangement, the clinician receives $120,000, leaving the group practice with $80,000 in retained revenue. That $80,000 is not profit. The practice still has to cover billing, software, occupancy, administrative payroll, marketing, insurance, payroll taxes and benefits where applicable, and other operating expenses. Industry benchmarks similarly identify clinician compensation, administrative staff, and overhead as major components of group-practice expenses (Smith, 2026).
For example, if $40,000 to $64,000 of that $80,000 is consumed by operating expenses, the practice would be left with approximately $16,000 to $40,000 in operating profit attributable to that clinician. That represents only 8% to 20% of the clinician's original $200,000 in annual collections.
The point is not that a 60/40 split is inherently good or bad. The point is that the split alone does not tell you whether adding a clinician will be profitable. A clinician generating $200,000 in collections does not necessarily generate $80,000 in profit for the practice. The economics have to work after the full cost of supporting that clinician is accounted for, which means the financial model should be built before you hire, not after the costs of the hire have already been incurred.
Interview multiple candidates. Ask for references from other group practices in your area, same size, same model, same reimbursement mix. A referral from a colleague who's used them for years beats a cold recommendation.
Cost: $2,500-$8,000/year for a small group (varies by complexity and region)
2. Hire an attorney specialized in healthcare and mental health
Your second foundational hire.
An attorney drafts or reviews all your contracts: employment agreements, independent contractor agreements, supervision agreements, client intake forms, HIPAA business associate agreements, and non-compete clauses. They help you navigate licensing laws, understand your state's requirements for clinical supervision, and protect your professional license and personal assets.
Early-stage practices often skip this or wait. Then someone leaves and takes clients. Or a former employee contests termination. Or there's an ambiguity in your supervision documentation that puts your license at risk. By then, legal bills are in the tens of thousands.
Getting a solid attorney up front costs less than fixing these problems later.
Like the accountant, interview multiple attorneys. Referrals from colleagues matter. You want someone who specializes in healthcare, understands behavioral health reimbursement, and has worked with group practices your size. A family law attorney, however smart, isn't the right fit.
Cost: $3,000-$10,000 for contract templates and initial setup (varies by region and complexity)
Ready to scale? Get a demo of how My Best Practice helps group practices manage compliance, billing, and team coordination (/demo). Start your free trial: https://referral.mbpractice.com/ref/Scale-Group-Practice
The critical sequencing: who comes next (months 3-6)
Once your financial and legal infrastructure is solid, the next hires depend on your growth model. But the principle is the same: hire the right people for the right seats, even if that means waiting for them.
3. Practice manager or administrative director
This hire often comes before clinical hires, especially if you're still seeing clients yourself while building the practice.
A practice manager handles scheduling, billing, compliance documentation, credentialing with insurance panels, payroll, and day-to-day operations. They're the person who makes sure the machine runs so you can focus on clinical leadership or seeing clients.
Give them scheduling and billing software that consolidates those workflows (/blog/best-practice-management-software-for-therapists), or you will simply move the administrative burden from one person to another.
Some practices combine this role with clinical director responsibilities, especially if you're small and can't yet afford two people. But be realistic about capacity. One person doing both well is rare. More common: one person doing both poorly, burning out quickly.
Timing: You can operate solo for a while. But once you have 3-4 clinicians, a solid practice manager becomes essential.
Cost: $45,000-$65,000/year for a full-time manager (varies by region and experience)
4. Bookkeeper
A bookkeeper handles day-to-day accounting: invoicing, expense tracking, bank reconciliation, payroll processing, and monthly financial reporting. They work with your CPA to ensure clean books.
This frees you (and your accountant) from the tedious work so attention goes to strategy and planning.
Timing: You can do this yourself in Year 1, but outsourcing it saves time and money by Year 2. Consider a fractional or virtual bookkeeper initially ($1,500-$3,000/month) rather than full-time.
Building your clinical team (varies by model)
5. Clinical director
This is where it gets interesting. The clinical director role varies by practice size and structure, but the core responsibility is the same: ensuring clinical quality, supervising staff, implementing evidence-based practices, and managing treatment fidelity.
A clinical director can be your first clinical hire if structured right. They can start by seeing clients, building a caseload to 15-20, then transition to clinical leadership as you hire more therapists. They supervise clinicians, establish outcome measurement systems (ROMs) (/blog/measurement-based-care-group-practice), develop clinical protocols, and ensure your practice meets quality and ethical standards.
Research on implementation leadership shows that supervisors who actively model new practices and create psychologically safe environments for staff to try them see far higher adoption rates than those who rely on policy mandates (Olin et al., 2020).
Critical point: Quality matters more than timeline. I'd rather overpay for an exceptional clinical director than underpay for an adequate one. The right clinical director who is brilliant clinically, manages staff well, and is genuinely invested in the organization is worth every penny. They prevent burnout, set clinical standards, and build a culture worth staying in.
You probably don't need a dedicated clinical director until you have 5 clinicians. But if you find an exceptional candidate before then, and you can afford it, deviate from the timeline. Right people in right seats is priceless.
Cost: $70,000-$110,000/year (varies by region, credentials, and experience)
6. Practice administrator and clinical director in parallel (scaling model)
Many growing practices hire a practice administrator and clinical director simultaneously once they reach 5-10 clinicians. The practice administrator handles operational systems; the clinical director handles clinical standards. Both are essential to sustainable scaling.
What about marketing, web design, and digital presence?
I see practices prioritize marketers and social media strategists early. While visibility matters, marketing is meaningless if your clinical contracts aren't legally sound or your financial structure isn't viable.
Get referrals first. Referrals from happy clients and referral sources often generate more revenue than social media. Once your foundation is solid, then invest in web presence and digital marketing.
Timeline: Months 6-12, after attorney and accountant are in place.
The reality: profitability and staff retention
Many group practice owners underestimate what sustainable margins actually look like. They see revenue and assume profit. Then they hire too aggressively, discover margins are tighter than expected, and the practice becomes unsustainable.
Based on consulting observations and industry benchmarking, group practices typically operate on 7-40% net profit margins depending on overhead and staffing structure. Once group practice revenue exceeds roughly $1 million, owner margins under 10% are common. The biggest expense drivers: clinician compensation (usually 50-60% of revenue), rent (often 15-20%), and administrative payroll.
Equally important is staff retention. Research on behavioral health clinician turnover shows that once compensation is at market rate, administrative burden, workload, and professional development become the dominant factors in whether clinicians stay (Curogram, 2026). Practices that retain staff invest in clear scheduling and documentation expectations, peer consultation and professional development, leadership that models new practices, and reasonable caseload management.
If turnover is already a problem, start with the staff retention strategies that address workload and administrative load before you revisit compensation (/blog/therapist-retention-strategies-group-practice).
Model your numbers before you hire. Run scenarios with your accountant. Talk to trusted colleagues who are willing to share real numbers. This isn't pessimism; it's due diligence.
The hiring framework: right people, right seats
Have a rubric. Know what you're looking for: credentials, experience, fit with your clinical model, and genuine investment in the practice.
But don't be rigid. If an exceptional candidate appears outside your timeline, someone who is clearly smarter, more competent, and more invested than the typical candidate, consider changing the sequence. The right people make the business successful and sustainable. Everything else is timing.
Building a sustainable group practice starts with the right foundation. See how My Best Practice helps practices streamline admin, billing, and team coordination so you can focus on clinical leadership (/free-trial). Start your free trial: https://referral.mbpractice.com/ref/Scale-Group-Practice
About the author
Dr. J. Ryan Fuller, Ph.D., is a cognitive-behavioral therapist and co-founder of My Best Practice (mbpractice.com), an all-in-one HIPAA-compliant EHR and practice management platform for behavioral health professionals. He also co-founded New York Behavioral Health, a private-pay group practice. Dr. Fuller is credentialed in CBT, REBT, DBT, ACT, and Schema Therapy, and served as the first Director of Research under Albert Ellis at the Albert Ellis Institute. His clinical and business expertise spans behavioral health technology, practice operations, and the intersection of evidence-based clinical work and sustainable business models. He regularly consults with growing group practices on scaling, clinical leadership, and financial modeling.
References
Heard. (2025). The Heard 2025 financial state of private practice report. https://www.joinheard.com/resources/downloads/the-heard-2025-financial-state-of-private-practice-report
Olin, S. S., et al. (2020). Implementing measurement-based care in community mental health: A model for measuring and improving fidelity. Administration and Policy in Mental Health, 47(3), 417-428. https://doi.org/10.1007/s10488-019-00980-w
Smith, A. (2026, September 1). Therapy practice financial benchmarks: What healthy actually looks like by practice size. Ensora Health. https://ensorahealth.com/blog/therapy-practice-financial-benchmarks/
Curogram. (2026). Behavioral health staff turnover: 2026 industry report. https://www.curogram.com/resources/reports