How to start a private practice in 8 steps: What you need to have before you have clients

1) Find a space. Teletherapy is certainly an option, but unless you are doing that exclusively, you’ll need a physical space to treat clients. 

Things to keep in mind when considering the kind of space you want:

• your commute – nearby to save time, or some time and space between work and home, as well as reducing the chance of running into clients on personal time

• client access – depending on who you want to treat, do you want your office close to mass transit, residential areas, or related businesses

• comfort - will it be comfortable for you as well as your clients – you’ll be there more than they will, so don’t overlook your preferences for windows, and comfortable temperatures (good AC/heat?), and is it quiet or can you hear traffic or neighbors’ offices?

• Privacy – can clients come and go and feel as though they aren’t easily being identified as a therapy client if that matters?

• Isolation - will it be isolating or will you have colleagues that will enable socialization or even consultation

Part-time Sublet. Subletting from another therapist can allow you to keep your expenses low while starting out. This is a financial advantage in the beginning, but unless there is room for growth it may be stressful and costly to move once you need more time. Do a cost-benefit analysis for this prior to deciding and you’ll want to do that for all of these options. Would I rather save money and endure a stressful move, having to change my address on all my stationary and on the web, notify all of my referral sources, etc.? Or would I prefer to pay for full-time space now, even though many hours will be vacant, knowing that I won’t have to move any time soon?

Full-time Space. This option will be highly valued if the idea of having to move later seems too stressful. You can find month to month arrangements or long-term leases that typically range from one to five years. Many landlords will also configure or renovate a space for you if you commit to something like a five year lease. Almost everything is negotiable; so don’t hesitate to ask for what you want. As a therapist, your needs regarding soundproofing and privacy may be different from other tenants.

Co-work space. Wellness Co-work spaces have become more and more common. Co-work spaces do address some of the disadvantages of both a conventional sub-let, or a full-time lease. Some allow subscriptions or rentals that may be part-time, which have the advantages of a sub-let arrangement. And they usually have options to increase your hours and days as you grow, simply leveling up your subscription or paying more rent depending on their business model. They are also set up with privacy and other concerns in mind, since they cater to health clientele. These can also provide a collaborative, collegial atmosphere. This can help from a social, ongoing training, and cross marketing perspective. Downsides could include a saturation of therapists in a particular area if there aren’t enough clients to go around and you certainly want to be sure the pricing fits your budget. But they also often include amenities you may do without otherwise or haven’t included in your budget when only considering a sublet or FT space elsewhere. Amenities may include beverage services, plush waiting areas, receptionists, scheduling, and even meditation spaces for clients while they wait.

2) Business phone. While you can use a personal cell phone to run your practice, you want to think carefully about the advantages and disadvantages of doing so. If you do, be sure that your outgoing message is intended for clients and contains everything that is ethically appropriate depending on your profession and state, e.g., emergency numbers to call for a crisis, etc.

Personal cell phone. You likely already have one of these, so using it for clients saves you money, ensures you’re reachable at all times (pro and con), and means you only have to carry one phone. The downside is that you will receive client and potential client calls on vacation, weekends, and both early in the morning and late at night. It allows clients to text you.

Business landline.  A landline at your office typically allows for reliable, clear reception, which a cell phone may not always provide. It does add an additional cost and you have to decide how to handle calls both while in session and when you’re out of the office. You can set up a voicemail system or a forwarding system to your cell phone as a potential way to handle calls when you can’t answer. 

Business cell phone. You can get a second cell phone. This has the advantage of not having to forward anything like a landline, since you can have it in the office as well as take it with you when you leave. It also allows you to keep your personal and professional calls and life separate, even allowing you to have two different outgoing messages. So you can be as silly as you would like on your personal cell phone’s outgoing message if you would like. And you can leave it at home or the office when doing something personal, when you only want to carry one phone and be focused on personal time, leaving your work (and the phone) behind. Depending on the plan, while it costs more than only having one personal phone, you can usually find one that is cheaper than a landline.

Call Center or Virtual Assistant. There are call centers and virtual assistants that range in costs and services. Some simply take messages and forward them to you so you can call clients or prospective clients back. Others can access your calendar to schedule new intakes, reschedule existing clients, and even take payments or discuss cancellation policies, etc. There are a multitude of options, and reports from therapists who have used these services have indicate variable satisfaction. So please read reviews and if possible only trust one that someone you know has used with success.

Forwarding system. Many therapists indicate that they use a forwarding system that allows them to provide a number to clients that can be forwarded to their personal cell phone or another number. Google Voice or Grasshopper ones many therapists use and you can even call people back from your Google Voice number. You do want to be sure to check with your licensing board or attorney to be sure that these or any other service meet any ethical, HIPAA or other requirements.

3) Website and Email. You will need a website. This will allow potential clients and other professionals to know who you are, your approach, how you have been trained, professional experiences and achievements, how to find your office, and how to contact you. You will need to purchase a domain, a host, and then create or hire someone to create your website. Most hosting accounts will also provide an email address for you. Once again, similar to the phone line issue, you have the option of using a business email address. While it means being responsible for checking two email inboxes, keeping business emails separate from personal emails can have advantages. If you use a professional email, it is a good idea to include your title, degree, and even your website, office location and phone number in your signature.

4) Professional Help. Therapists need professional help too. As a business owner, while you can do a lot of things yourself, there are unquestionably other professionals who can do some things better. When it comes to legal matters and many others, it is critical you find a great professional that you can trust and afford. Here some people you definitely need to hire and few that are optional.

Attorney. You will need to be sure that your customer contracts, HIPAA forms, employee contracts, etc. are appropriate. There area also many other decisions you might make starting off or as you grow, e.g., labor law questions if you hire employees, etc. for which you’ll need an attorney to guide you. 

Accountant. While you may choose to file your own taxes, most of us will not be as knowledgeable or as efficient with this or other matters an accountant can address. As you will see below, an accountant is also a valuable resource in determining the structure of your business and other decisions you will face when starting a private practice.

Marketer. You can easily sign up for sites like Psychology Today and even purchase and manage your own advertising campaign. But you also have the option of hiring a person or firm to do that as well. If you are going to manage it yourself, it is a good idea to educate yourself about how Google Adwords work.  The last thing you want to do is try to save money by doing it yourself, but instead spend a lot of money on ads that are ineffective. Likewise, if you do hire someone to manage an Adwords campaign and take on digital or other marketing efforts, be sure that you regularly monitor your return on your investment (ROI). That means you want to look at how much you are paying them and how much revenue they are bringing you. You can then even calculate your customer acquisition costs (CAC). CAC is the amount of money you are spending on marketing divided by how many clients you receive as function of those efforts. 

Practice Consultant. Once you start a business, you will quickly discover (as they discover you) how many vendors there are who want to sell you their products and services. Some of these will be practice consultants who can offer an array of services to help you start, grow, and successfully maintain a private practice. There seem to be a variety of types of services offered and you may see that these consultants vary from experienced well established mental health professionals to social media “gurus.” Given the reports from private practice owners it appears that pricing and results vary greatly. Proceed with caution and healthy skepticism, but if you know someone you trust who has had a very good experience where there was a good ROI, this could be an extremely good choice early on. It is typically much easier to implement strategies when beginning than after you have already made certain purchases, engaged other professionals, written pages of copy, etc. 

5) Business structure. One of the first legal/accounting decisions will be to determine what kind of business structure you want. This is where an accountant or an attorney can be invaluable. There are many choices and depending on your profession, number of owners, state, and even the kinds of services you offer your options could change. You may select an limited liability corporation (LLC), a professional limited liability corporation (PLLC; which can be a form of an LLC), S-Corp, Partnership, Professional Corporation (PC), etc. Your accountant or tax attorney can really advise you on the advantages and disadvantages of each. 

6) Business bank account and Credit Card. You will want to have a business bank account and credit card. While you will discover that a business bank account will likely pay less (frequently 0%) interest than you’re personal checking account, it is still recommended you have one. You will want all of your business transactions, i.e., deposits, and checks to vendors to be done from your business account. 

7) Insurance. As a professional you may already be familiar with malpractice insurance. If you haven’t looked into that, be sure to get a malpractice plan as soon as possible. In addition though as a business owner there are other kinds of insurance you’ll need to consider. Depending on the kind of office space you rent, you may need to purchase your own liability insurance. Consulting with your own attorney about this is a good idea. You want to be sure that you are covered in case a client accidentally falls or injured in some other way while in your office. And if you are now self-employed and aren’t receiving benefits elsewhere, you will also want to look into getting your own health insurance. This can often be extremely expensive and it can take time before coverage begins. So if you need it, please start researching plans soon. One option regarding insurance is to find an insurance broker. S/he can present you with a number of insurance plans and can explain what is covered and the various cost structures. They could save you lots of time and stress, and you can always choose not to purchase the plan with them once they offered you options. So it is unlikely to hurt to reach out to one and hear what he or she says. 

8) Software. There are different kinds of software a private practice owner may want to consider. The most common appear to be electronic health records (EHR) and bookkeeping software. While keeping your clinical records and bookkeeping can all be done on paper, there are some significant advantages to using software. Once you have an accountant you can ask if providing him or her with a spreadsheet in the form of a csv, excel, or even Quickbooks file is preferred. If it is you can use an EHR and bookkeeping software, or if you select the right EHR, you can find one that takes care of exporting that kind of file and saving you from having to have a separate piece of bookkeeping software. A good electronic health record can help you do better clinical work and simultaneously help you do what you need to manage your financial transactions and provide your accountant (or you) with what is necessary to take care of your tax obligations. In fact, a good EHR may even provide some reporting that can help you grow your business. Many EHRs provide free trials and once again if you can read reviews or find someone you trust that recommends it, that can mean a lot.

Clients

How many do you want per week?

Who are they? Population, disorder, using insurance or not, etc.

Envision the practice you want. 

What do you want your ideal practice to look like? 

How many clients do you want to see per week?

How many weeks per year will you see that many clients? Before you answer, keep in mind, clients and clinicians get sick, take vacations, and celebrate holidays. Your number may be close to 45 per year. But it all depends on you.  You may also recognize on any given week that you are in the office, you may have cancellations, in which case if you want 25 clients, you may want to schedule 27.