The Therapists’ Essential Guide to Starting a Private Practice

Embarking on the journey to open a therapy practice is a big step towards clinical autonomy. I can vividly remember sitting in graduate school to become a Marriage and Family Therapist and dreaming of my future office. Back then, I had no idea how to start a private practice. I felt confused and overwhelmed and didn’t have a private practice coach to guide me through the process of starting up a counseling practice. 

• Private Practice Pro Tip: Don’t wait for the ‘perfect time’ to open a therapy practice. Start where you are with what you have. Your practice will evolve as you do! 

Since then, I’ve opened my own modern private practice, hit multi six figure earning years, and managed to prevent burnout by taking care of myself along the way! I’ve helped over 2000 therapists build their practices in my online courses. 

The key to an out-of-network or cash pay therapy practice is building a business that is an extension of your authentic self. When I first started my therapy practice, I thought being a generalist was the way to reach the most out-of-network clients. However, after over a decade of teaching other LSCWs, LMFTs, PsyD’s, and Social Workers how to promote themselves, I can assure you that niching down is the way to go. 

Step 1: Become a Licensed Therapist  

Your credentials are most important. Clients value education, experience, and advanced training. Ensure you have the right licensure for your practice area – whether it’s LMFT, LCSW, PSYD, or PhD.  This step is more than just a formality; it’s about professional credibility and trust. Although coaching models have become increasingly popular, I see clinical value as well as business value in becoming a fully licensed psychotherapist. 

Step 2: Create a Solid Business Foundation 

Your practice is more than therapy; it’s a business. Select the right structure, be it a sole proprietorship, S-corp, or an LLC. This choice shapes your business – from taxes to liability. I highly recommend consulting a small business attorney or certified professional accountant for questions you might have about which type of professional company to become! 

Regardless of whether you decide to take insurance or to be an out of network therapist you will need an NPI and an EIN number. An EIN number is a number that the IRS associates with your business. Your NPI number is a National Provider Identifier that is assigned to you as a healthcare professional. I go into more depth and detail about these specific numbers and how to apply for them in my Private Practice Roadmap Course. 

Step 3: Create a Solid Business Plan for your Practice

A solid business plan will function as your roadmap toward a successful therapy private practice. 

When I first started in private practice I felt hesitant to create a formal business plan. I was busy and the last thing I wanted to do was sit down at my computer and type up a business plan document! But creating a business plan helps you get clear on your goals and creates a framework for executing those goals. 

A solid business plan should reflect not just your financial goals, but also your mission in helping others. Include elements like:

• Your mission statement
• Your ideal client or clients
• What therapeutic services you offer
• How you plan to market your counseling practice 
• Financial, legal, and other logistical practice concerns

Step 4: Find an Affordable Office for your Private Practice Therapy Practice 

Myth Buster: Your first office doesn’t have to be perfect or permanent. Many successful practices evolve through various spaces over time. Check out this article for other great tips on finding the perfect office for your counseling practice. 

When it comes to finding an office for your therapy practice, location matters! Potential therapy clients want to feel welcomed, comfortable, and warm in your office! Whether a cozy office or a virtual therapy office, your practice space should align with your therapeutic approach. 

Pro Tip: Consider subletting an office from another therapist before you commit to a lease! Therapists often sublet offices together, and spending time networking before you commit to a lease could allow you to find colleagues (aka referral sources) to share space.

Step 5: Learn to Market Yourself and Your Therapy Practice 

Private Practice Pro Tip: Marketing your therapy practice doesn’t have to feel uncomfortable. Remember, if your ideal therapy clients can’t find you, they are missing out on services they need! 

Marketing your counseling practice might feel tricky. When I opened my first office, I wanted to reach potential clients but I didn’t want to feel like I was, “selling myself.” However, building a thriving private practice requires us to show our faces in the places where our ideal clients might be. In my Marketing for Therapists course, I break down every step you need to take to fill your practice with out of network, cash pay clients. Here are three tips to get you started filling your practice.

• Build a ‘business support network’ – include mentors, peers, and professionals like accountants and lawyers.
• In the digital age, a strong online presence is vital. Create a website that speaks to your ideal client. 
• Engage in social media with authenticity. 
• Remember, your story. How you tell it can be your most powerful tool in connecting with potential clients.
• Having a strong niche is essential to marketing a successful, cash pay therapy practice. 

Step 6: Create a financial plan for your therapy practice 

Private Practice Pro Tip: Don’t undervalue your services. Setting appropriate fees is crucial for sustainability.

Understanding your private practice finances is crucial to the success of your business. Don’t forget to consider the items below. 

• Your fee
• Your overhead or expenses
• Saving for taxes 

Step 7: Select the Right EHR for Your New Therapy Practice 

Efficient and confidential record-keeping is the backbone of your practice. Invest in a reliable EHR system and develop a seamless scheduling process. I personally love SimplePractice and I’ve used it since 2016! Here is a link for two months free.  

Your Practice, Your Journey

Starting your therapy practice is more than setting up an office; it’s about creating a space where healing, growth, and transformation happen. It’s a commitment to yourself and your clients. Stay true to your vision, adapt, and grow. You’re not just opening a practice; you’re opening a world of possibilities for yourself and those you serve.

Watch this video to learn more!