My Top Tips for Therapists Considering Private Practice

Private practice and I have a lot of history in a relatively short amount of time. I started a practice in 2019, hired an intern within a year, mostly closed up shop mid-pandemic to take a W2 job again, worked as an office manager for several group and solo practices simultaneously for a year, reopened my practice, and have continued to contract with and interact with practices ever since.

I’ve learned a lot: from my own mistakes; from the good, bad, and ugly of other practices, and from what has worked. If we only had one hour to consult, this is what I’d tell you.

Thinking about starting a practice? Read this first.

1. You Need a Real Business Plan 

This is not a business plan:

1. See clients
2. Hope to make money

Yet this is what a lot of therapists do. I think this happens for two primary reasons: many therapists jump into private practice out of desperation and burnout, and most therapists don’t naturally have a lot of business skills.

If you want to have a successful, sustainable business, you have to obtain the skills to do that well. Simple as that.

And you don’t just need a business plan. You need a plan that supports the fullest version of your practice, not the first step. In other words, if you’re still working a full-time job and start your practice on the side, don’t create a business plan that covers you when you’re seeing 5 clients a week. If you want your practice to eventually be your full-time job, you need a model that will accommodate that.

You need to be thinking about budgets, systems, and processes as if you are already at your final goal. Your daily processes can change and grow into your model. But if you’re trying to grow and have a model that is too small, you’ll always be trying to catch up.

What should be covered in a business plan?

1. Vision, mission, and values: seems kinda silly and corporate, I know. But defining your practice’s purpose can be a guiding compass when things get messy.
2. Short and long-term goals. These could be about your caseload, your independence or flexibility, amount of vacation you take, monthly or annual income…. whatever you want honestly.
3. Clinical specialty and niche: who do you serve and how do you serve them? This is about presenting concerns, modalities, and populations. But it’s also about the model of care you’re delivering (in-office, telehealth, hybrid, groups, consulting, packaged programs, courses, etc.)
4. Financial planCosts: startup costs, fixed operating expenses, variable expenses, taxes, personal benefits if neededIncome sources: insurance? private pay only? diverse income sources?Minimum acceptable income: the amount you have to make to keep the doors open.Goal income: the amount you want to make at a sustainable operating level
5. Costs: startup costs, fixed operating expenses, variable expenses, taxes, personal benefits if needed
6. Income sources: insurance? private pay only? diverse income sources?
7. Minimum acceptable income: the amount you have to make to keep the doors open.
8. Goal income: the amount you want to make at a sustainable operating level
9. Legal and administrative details: your practice’s legal structure, the correct registrations with your state and possibly municipality, liability insurance, tax rates for where you’re operating, compliance with regulatory and legal requirements
10. Operational details: revisiting care delivery more tangibly. What software and programs will you use? What hours do you want to work? Will you have a physical office, telehealth, only, or a hybrid model?
11. Marketing plan: how will clients find you?

While there are plenty of other things that could be added here, these are the bare minimum.

How to calculate minimum and goal income:

Start with the monthly number you need. How many sessions would you need to hold a month to hit that number? That’s Step 1. Step 2 is subtracting all the expenses from that number, as well as a 5-10% average cancellation rate. Re-calculate number of sessions per month. Step 3 is then multiplying this number by the number of weeks per year you would ideally work. Now you have a rough idea.

If you plan to take insurance, the rate is fairly fixed. If you want to take multiple plans, average the rates to get a basic number. If you want to do private pay, compare the final session rate number you came up with to what is realistic in your area. I’m not saying you need to charge bottom of the barrel prices or base your rate on what other people do. Not at all. Your rates need to be based on your business model, not anyone else’s. But if you want to make $10,000 a month and only hold 10 sessions a month… that’s probably not going to happen. Figure out where the compromises need to be made BEFORE you dive in, to ensure this practice can actually work with your life.

2. Delegate and Outsource

There are a lot of parts of running a practice that aren’t therapy: marketing, accounting, billing, administrative tasks, etc. If there is something on that list that you hate, aren’t good at, or just don’t want to do, consider outsourcing it. I see so many therapists insisting on spending as little money as possible, so they keep tasks on their plate that they really aren’t equipped to do and/or don’t have time to do. So what happens? It doesn’t get done. While some tasks can slide, there are many that just can’t. So this is a problem.

Spend the money and do it right. Consider what your hourly rate is and think about how much time you spend doing these tasks. I realized a long time ago that I could either spend $200/month (less than 2 hours of my clinical time) on full service bookkeeping, or I could struggle through it myself, make a lot of mistakes, and spend several hours a month trying to fix problems. DIY isn’t everything.

I currently outsource insurance credentialing, insurance billing, registered agent services, and accounting (bookkeeping, S Corp payroll, and tax filing). I answer all my own calls and emails, do my own marketing (which is pretty minimal to be honest), built and update my own website, and manually complete most regulatory and licensing paperwork. If I was running a group practice, I would absolutely outsource all of those things.

3. Niche Down

Having a specialty isn’t really optional. It doesn’t have to be the most specific thing in the world. I still have multiple niches. But they can be easily identified in just a few words, and they generally go together.

Your niche is the intersection of your clinical skills and expertise, ideal populations, and needs in your community. You may have secondary niches that encompass two of the three.

If you market yourself as having 37 specialties, it just looks like you don’t really have any. It gives off the impression of throwing spaghetti against a wall and seeing what sticks, and that’s not the kind of behavior most people want to trust with their mental health. It’s also generally confusing and ineffective from an SEO perspective. Even if you’re actually an incredible therapist in a wide variety of areas, no one will have the opportunity to know that if your marketing is bad.

Another angle: if you choose a niche, but there is minimal community need (i.e. you have the same bland niche as everyone else), that’s also not helpful. Remember that we provide healthcare. My two cents? It is usually a good choice to have at least one of your niches be an actual mental illness. If you only work with super high-functioning people with very positive, goal oriented issues… why do they need therapy again?

Niching down is partly because of marketing: you need to present yourself in a way that is clear, relatable, and trustworthy to your clients. You also need a consistent online presence for SEO and AI to understand what you’re an expert in (and rank you for those things).

But it’s also just a wise choice clinically. Having a specialty decreases burnout, allows you to dive deeper into your areas of expertise, simplifies client vetting, and is more cost effective (as you don’t have to be trained in a dozen different things).

Is it possible to have a sustainable career as a generalist? Yes, absolutely. But in my opinion, that requires a wide variety of skills and a lot of word-of-mouth referrals built over a long period of time. If you're just getting started, it's going to be really hard to stand out that way. 

4. Hold Yourself Accountable with Systems

When you’re your own boss, it’s easy for things to slip. You don’t have anyone reminding you to keep up with notes and billing, respond to client inquiries, file your estimated taxes, update your therapy directory profiles, etc. You have to take ownership of your ongoing tasks, and creating systems early on helps with that.

These systems could involve things like software to support automation, daily/weekly/monthly task lists, dedicated admin time, putting regulatory deadlines in the calendar every year… they can be anything you need, and they certainly don’t have to be complicated or expensive. But do something so that you can ensure your practice can keep running. You don’t want to forget the wrong thing, and it turn into a costly or illegal mistake.

5. Never Stop Growing

Bring your mistakes and vulnerability to supervision. Receive feedback with grace and genuinely reflect on it. Seek consultation regularly, even if you no longer need formal supervision. Take trainings that actually teach you something useful, rather than the bullshit, boring, way too easy, self-paced, sleep-inducing cheap online CEs.

Own your stuff and continue to pursue personal growth. Identify and regularly re-evaluate your values, and how your behavior aligns with them. Give feedback with compassion and clarity. Ask questions, and be open to answers. Engage in community- total isolation is rarely a good thing in this field.

I try to abide by the concept of having colleagues who are ahead of me, colleagues who are with me, and colleagues who are behind me in my professional life at all times.

Ahead of me: more seasoned in general, more skilled in a particular expertise, further ahead in clinical experience, have obtained goals I want to pursue. Consultants and mentors.

With me: peers who can be supportive, commiserate with me, offer solidarity and laughs. Generally in my same professional season of life, or perhaps pursuing adjacent goals.

Behind me: grad students, pre-licensed therapists, or therapists with less experience than me. I meet the qualifications of the “ahead of me” person for this colleague, and I provide support and mentorship to them. This could be formal clinical supervision, but doesn’t have to be, and sometimes is better when it's not.

Well, what did I miss? Seasoned practice owners, would you prioritize these same tips? I’d love to hear your thoughts! And if you are a new practice owner, and this information has been helpful, I’d love to chat with you more about professional consultation. 

Thanks for reading!