9 Steps To Open Your Own Private Therapy Practice Business

Changing Perspectives


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If you are a therapist, counselor or psychotherapist thinking about starting your own private practice, your head is probably filled with many questions:

  • How do I start a private practice?
  • What are the steps to starting a private practice?
  • How much do you make in private practice?
  • Am I really ready for private practice?
  • What are the common mistakes when starting a private practice and how can I avoid them?
  • What are the costs associated with starting a private practice?
  • What are some tips for starting a private practice?
  • Is there a checklist for starting a private practice?

All of these questions can be overwhelming, leaving many clinicians terrified about taking their first step.

​Take a deep breath, you’ve come to the right place. In just 9 simple steps you can start to make your dream of operating your own private practice a reality!

Step 1: Identify your niche

This step may be the most difficult for many clinicians. We are trained to be open to helping and supporting everyone and our instinct may be to cast a very wide net.

However, you should think about it from the perspective of the client. Imagine a client searching for a new therapist. Would they rather select a clinician who will see anyone or a clinician who specializes in the area in which they need support?

Think back to your training and your professional work experiences. Where has most of your work centered? What types of clients and work bring you the most fulfillment and make you feel the most confident? Start with what you know!

Remember, you can always change your specialties and niche at a later date.

​​Step 2: Choose your space


(Photo Credit: Jenni Brennan of Changing Perspectives)

When you are first starting out, you may think that any office space that is affordable is a good option for you. While this might be good for your wallet, it may not be the best for your overall success.

Here are some things to consider when choosing your space:

Think about the town or city in which you live. Do you want an office in the same location? If so, what is your plan for when you run into your clients and patients at the community library, supermarket or at your children’s school? Would you rather set up your space somewhere outside of your town so that you reduce the chances of these interactions or are you comfortable with living and providing clinical services within the same town?

How easily accessible is your potential office space for clients? Is it located near highways? Is there ample parking? Is it accessible for individuals with mobility needs? Where can clients wait for their session?

Would you rather operate in your own space completely or rent space where other clinicians are also providing therapy? How much value is there for you to be able to see and engage with other clinicians during your work day? Although I operate my own private practice, I have elected to rent space in a large suite with other mental health clinicians. This choice has proven to be great for me as it allows me increased connections for networking, provides limitless referral opportunities and has yielded some new friendships.

Subletting vs. Leasing
How many days per week do you want to see clients? When I first started my private practice, I chose to sublet an office space for two days each week but knew there would be a potential to rent a full-time office in the same suite in the future. It was important to me to have opportunities to expand my days with clients without having to completely relocate. Consider your future goals as well.

Step 3: Choose and register your name

Clinicians can get bogged down by this step, scared that their decision has to be perfect. Remember, you can certainly change the name of your practice in the future.

Do you want to use a creative name for your business? Do you want to eventually bring other clinicians in to work under you? Do you want to utilize your name as your business? Any option can be a good option, but it can help to think a bit about your future goals before deciding on a name.

Once you have selected your name, it is time to register that name with the government. I always recommend that people register for an Employee Identification Number (EIN) for tax purposes rather than their social security number as it helps to keep personal and professional finances separate. Click here to apply for your own EIN.

The IRS has some good resources for individuals beginning their own business. Click here to read through some of their information and tips.

In addition to registering your business name with the IRS, you will also need to register your business name with the town or city in which you will be providing services. This process is commonly referred to as a Doing Business As Form or DBA Form. Click here and search “file a DBA in (your state)” to find state specific information for how to file a DBA form.

Step 4: Advertising

Once you have determined what type of services you will provide in your private practice, where you will provide them and registered your private practice name, it is time to start advertising your services.

​​​One great way to advertise your business is to create a website that tells about your background, areas of specialty, practice approach and location. Your website can be as simple or as detailed as you would like it to be and you do not need to have any background in website design.

Lastly, don’t forget about social media. Facebook, Instagram, and Twitter can all be effective ways to get your business name and services out there in the public eye. I strongly suggest having any social media profile you create for your business be completely separate from any personal social media accounts you may have.

Step 5: Protect yourself

We insure almost everything these days from cars to homes to apartments to our health. Your private practice is no exception. Contact a variety of insurance companies to obtain quotes on insurance coverage options for your small business. In addition, research options for professional liability insurance. Often your credentialing or licensing authority can recommend a few companies for you that will provide you with protection should a client or patient ever bring legal action against you. Many clinical social workers, including myself have found wonderful liability insurance with NASW Assurance Services. Don’t put everything you’ve worked so hard to build at risk by skipping this step!

Step 6: Pursue credentialing with insurance companies or Employee Assistance Programs

By far the easiest income method when in private practice is through patients and clients who pay privately out of pocket. However, it is becoming increasingly difficult for individuals to afford to pay full cost without some assistance from insurance. It’s best to not put all your eggs in one basket. So, while you should certainly try to bring in a client base that will pay privately, it is also a good idea to become credentialed with at least one insurance company or employee assistance program. Perform a search of health insurance companies in your state and then review their behavioral health credentialing process. Many insurance companies are now utilizing a central credentialing process with CAQH ProView. CAQH can be a great first place to go when interested in pursuing insurance credentialing.

Step 7: Develop record keeping and billing

One of the most important aspects of your work will be to maintain HIPAA Compliance with your record keeping. To do this, I have eliminated all paper records. The only paper files I have for my clients is a file folder with their first name, a tracking sheet of their appointment dates and some notes about their homework for the week. Everything else is tracked electronically. There are a number of options for you to choose from when selecting an electronic medical record system. Take your time to explore a variety of programs before you select one.

Step 8: Determine payment methods

How will your patients and clients pay you? Are you going to require cash only? What about checks? Are you open to clients and patients using credit cards via programs like Square or PayPal? What about even newer methods of payment like Venmo? I can tell you that the more options you offer, the more likely it is that your patients and clients will be able to pay you at the time of their session, cutting down on the amount of time you will spend chasing down unpaid bills. My client base is a complete mixture of payment via all of the previous methods and they appreciate the option to pay in whatever method works best for them. Be sure that your selected payment method is approved for HIPAA compliant use.

Step 9: Create your forms

The final step before you start seeing your new clients and patients is to make sure you have all of your paperwork in order. You will want to make sure that you have, at a minimum, the following forms ready for your clients to review and complete:

  • Cancellation Policy: You should consider implementing some sort of cancellation policy with your clients. Many clinicians opt for a 24-hour cancellation requirement with a fee attached for any sessions cancelled with less than 24 hours’ notice
  • Screening Form, Registration Form and/or Intake Questionnaire: These forms allow you to collect a wide variety of information from your clients to help guide your sessions.
  • HIPAA Overview and Acknowledgement: This standard, yet lengthy form, informs clients of their privacy rights and is required to be provided to each client.
  • Informed Consent: Perhaps the most important document of your practice, this serves as a contract between you and your client and informs them of a number of their rights.

​Overwhelmed? If so, that is normal! Take a deep breath and remember that you don’t have to tackle these 9 steps all in one day, one week, one month, or even one year. You can set your own pace. I encourage you to lean into your discomfort though and start chipping away at these steps so you can get on the road to meeting your goals. ​

Why wait any longer?

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The goal of Changing Perspectives is to provide education, resources, and support to people in the areas of grief, mental health, parenting, and relationships. While the content may sometimes be heavy, I strive to explore it in a way that is light, positive, and inspirational.


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