The Ultimate Guide to Starting Your Own Private Practice

Starting a private practice as a therapist, psychologist or other behavioral health professional is a thrilling experience. You get to choose your clients, set your own hours and use new techniques to grow professionally. Being your own boss can feel liberating, but it also takes some business know-how. You'll need to consider factors like legal requirements, how you'll get paid and how you'll find new clients in addition to your work as a therapist or psychologist. In this post, we'll show you what you need to know to help you start a rewarding and lucrative journey.

Table of Contents

• 8 Steps for Starting a Private Practice
• Simplify Documentation With ICANotes

8 Steps for Starting a Private Practice

Here's a list of things you must consider before you jump into private practice as a psychologist, therapist or another behavioral health clinician. The following elements will help you avoid mistakes early on and keep you moving in the right direction.

1. Develop Your Business Plan

Every business needs a plan. A thoughtfully devised business plan will be your map and help you make critical decisions, stay organized and keep on track with your goals. You might require a detailed business plan if you need to apply for a loan or grant for your practice. Preparing a business plan should be one of the first steps you take. Here are elements to include in your plan:

• Mission: Write a mission statement describing your reasons for running a practice, who you wish to serve and how you plan to help your clients. If you have values that play a vital role in shaping your vision, include these with your mission statement.
• Goals: Aim to include specific and attainable long-term goals and short-term goals. Expect your goals to change as you evolve. For example, a long-term goal might be to see 15 clients a week in two years. A short-term goal may be to write one blog post a week for your practice's website during the first three months of opening. Consider what your business needs the most. Identify key performance indicators (KPIs) and make a plan for tracking them.
• Financial information: The financial component of your business plan will include your office rent and utilities, staff wages, liability insurance, training courses, marketing costs and other related operating expenses. Also, consider how you'll save for retirement and vacation time. Once you know how much it'll cost to run your practice, figure out the minimum income required to pay your bills and support your lifestyle. This will help you set your fees.
• Marketing strategy: Determine the client base you want to reach and how you'll connect with referral sources. Include your strategy in your business plan. You can reach more people and help them contact you by developing a website and social media pages. If you create a website, include helpful blog posts related to therapy and self-care, so people can find you when they search for answers online.
• Population research: Make sure you have a good understanding of the people you'll be serving. Pay attention to what specialties your area might need and trends that could influence your practice, such as changes to insurance guidelines.

2. Take Care of Legal Requirements

When you own a therapy private practice, it's considered a small business regulated by local and state laws. You might ask an attorney or accountant to help you establish your practice and ensure you're compliant with regulations. Some areas you'll need to consider include:

• Zoning codes: Zoning codes regulate where you can practice and the type of building you can use for your business. Zoning laws also govern details like the signs you're allowed to install to advertise your practice.
• Business licenses: You may need to obtain a business license that will grant you the right to operate your practice in your municipality. Depending on your location, you may also need a county license. Check with your local and state governments to see exactly what you need to practice within your specific area.
• Ethical and legal qualifications: What specialty do you wish to practice? Do you have the certifications and licenses needed to offer the services you wish to provide? You can check your state licensing board to ensure you have the necessary credentials.
• Malpractice and liability insurance: Before you accept clients, you need malpractice insurance to protect you in case you are sued. You may also want general liability insurance to guard you against lawsuits if a client is injured while visiting your office. You may be able to get discounted insurance by joining a professional organization like the American Psychological Association (APA).
• Business structure: Your business structure impacts the amount of taxes you pay and may offer legal protection if your practice is sued. You have several options to choose from, such as registering as a limited liability company or a professional limited liability company. These distinctions add some legal separation between you and your business. You may wish to speak with an attorney or accountant to determine the best structure for your needs.
• Tax and practice identifiers: You will also need to file for an employee identification number (EIN), which the Internal Revenue Service (IRS) uses to identify your business for tax purposes. It works similarly to a social security number but for organizations. You will also need a national provider identifier (NPI), a 10-digit number assigned to healthcare providers. Even if you don't plan to take insurance, your NPI will help with authorizations and eligibility information and allow patients to seek reimbursement through their providers.

3. Set Up Your Finances and Determine Fees

Create a financial plan for your practice. You'll need to set up a business bank account and, likely, a separate business credit card. Then, find a system to track income and expenses and develop your budget. Expenses to consider include:

• The costs of filing and legal expertise for setting up the business.
• Website hosting and maintenance costs.
• Electronic health record (EHR) software.
• Rent, utilities, furniture and upkeep for your office space.
• Phone and internet services.
• Staff pay and benefits if hiring additional help.

One element of finances that can be particularly challenging is establishing your fees. Setting an hourly rate may not come easy to someone passionate about helping others. However, to grow your business and keep it thriving, you need to make a profit. To determine your fee, consider these tips:

• Find out what other counselors charge in your area: First, research other counselors in your area and consider what they charge. Focus on researching behavioral health professionals who have similar training and experience as you. By setting comparable rates to other practices in your area, you won't have to feel like you're charging too low or too high for your services, and you'll have better luck attracting clients.
• Don't set your rates too low: It's recommended to set fees that match the top half of other local counselors. You don't want to charge too little because potential clients will likely care about your reputation more than low costs.
• Consider your financial obligations: Figure out what you need to charge to operate your practice. You'll need to consider how many clients you can realistically see per week to meet your financial goals.
• Know what to expect with insurance company contracts: If you plan to accept insurance, determine the rates you can expect to receive with each company you're interested in. Remember, you'll need to charge clients what the insurance payer agrees to pay, and this can also affect your rates for self-paying clients. Insurance companies may offer a lower fee than the typical rate in your community, but you'll have access to more clients by accepting insurance.

4. Establish Your Office and Software

These two resources create the foundation for how you will deliver your services. Investing in a platform and space that meet your needs can save you money in the long run and provide an improved patient experience.

Your office plays a vital role in making clients feel comfortable and encouraged to return. For example, according to one study, participants preferred therapy offices with soft and orderly features. You'll want to invest in your office space and make it feel cozy and welcoming. This doesn't mean you have to spend all of your savings on furniture or decor, but you will want to put some thought into the way your office looks and feels. Here are some tips:

• Bring in nature: You can use the healing and stress-reducing qualities of nature by decorating your office with plants or serene landscape paintings. If you have windows, allow natural light to brighten the room. If you do not have any windows, use soft-light table lamps instead of fluorescent overhead lights.
• Display your credentials: Help your clients feel confident in your expertise by hanging your diplomas on the wall.
• Provide comfortable chairs: Make sure you have comfortable seating for your clients. The APA recommends including a chair with a back at shoulder height to give the client a sense of protection. It's also a good idea to include a small table next to the chair so the client can place their belongings and establish a "territory."
• Choose light colors: Select soothing shades of blue or green for the walls to create a calm, relaxing environment.

When it comes to software, modern resources are vital for efficiently offering high-quality care and the modern experience your patients have come to expect from their providers. Consider these elements when choosing your digital tools:

• EHR: Your EHR underpins nearly every interaction you have with your patients. It needs to be compliant with the Health Insurance Portability and Accountability Act (HIPAA), with strong security and features that facilitate easy, effective documentation. Look for third-party integrations, too, which can help you connect with labs, clearinghouses, health information exchanges and more.
• Telehealth platforms: Telehealth has become a major opportunity to reach more patients, including those who struggle to get to the office or who simply prefer the convenience of a video call. These systems must also be HIPAA-compliant and reliable. Ideally, your telehealth solution should work on a variety of platforms, so you and your clients can access it from any device. Other helpful tools include virtual waiting rooms, screen sharing and group sessions.
• Billing and payment systems: Healthcare billing and insurance payments can be complicated. Look for billing and payment systems that simplify the process on your end — particularly with integration to your EHR — and allow clients to make payments conveniently.
• Scheduling platforms and messaging tools: Scheduling and messaging tools can offer modern functionality like patient self-scheduling, appointment reminders, easy digital communication and in-office notifications upon arrival.

Other resources to consider include assessment tools, patient portals, document management solutions and e-prescribing. Remember that not all solutions are designed for behavioral health or even healthcare. Make sure that the platform you choose can meet your unique needs, especially regarding security and charting. ICANotes offers all of these features and more to serve behavioral health providers in various settings.