The ThriveTalk Guide to How to Start a Private Psychotherapy Practice

So, you’ve decided that the time is right to start up your own clinical practice. Where do you start? Whether you’re fresh out of training or going solo after leaving another work setting, there are many things to consider. It’s recommended that you do some planning before taking the plunge. In this article, we cover the basic information that you need to know about how to start a private psychotherapy practice. Read on to learn more.

The Dream of Private Practice

Many of us begin our clinical training with the dream of eventually opening our own practice. Survey data suggests that the majority of mental health workers share this dream – although not all achieve it, and private work is certainly is not for everyone. What’s the appeal?

For starters, you get autonomy: the freedom to determine your own work schedule and areas of clinical work. You get flexibility and you’re building your own dream, rather than contributing to someone else’s (i.e. your employer). If financial freedom is a part of your dream, then private practice work certainly provides the opportunity to achieve this. Let’s talk about what you need to consider in order to make this dream a reality.

Starting Your Business

Why are we, as therapists, so often uncomfortable about foraying into the world of business? Is it because this vital component of therapy work is often neglected in our training? Or is it because many of use identify as “helpers” and feel uncomfortable about charging for our services?

Dear reader: you are likely a trained clinician with an in-depth knowledge of concepts such as denial, repression and suppression. It’s time to own the fact that being a successful therapist means running a business! Once you’ve accepted this fact, you’ll be better equipped to serve your patients. You’ll also be ready to start thinking about some practical aspects of how to start a psychotherapy practice, which we discuss below.

Business Licensing

First things first, you’ll need an approved business license. These are generally affordable – the price varies according to your annual income bracket. The business can be registered under your own name or under a more general name that you may choose for your practice. In the case of the latter, you’ll need to submit an additional application to have your practice’s name formally registered.

Business and Malpractice Insurance

For any clinician that’s wondering how to start a private psychotherapy practice, it’s essential that you protect yourself. Apply for malpractice insurance before opening your doors to the public, as it can take a month (and sometimes longer) for your application to be approved.

What about business insurance? This may not be necessary if you are subletting your space and are automatically covered by an existing insurance policy. However, if you own or are leasing your own space, business insurance is a must.

Record Keeping and Paperwork

Your clinical notes need to contain information regarding a) why your client is seeking therapy, b) your own observations, c) your clinical assessment and formulation and d) your treatment plan. Where should these notes be kept?

If your notes are hand-written you could store them in a locked cabinet. If you take notes on your computer, make sure that they’re password protected and encrypted. Also keep in mind that most states require clinicians to keep their notes for at least 7 years.

Finally, when it comes to paperwork, you’ll need to provide a consent form, in which you explain the limits of confidentiality and other important aspects of the therapeutic relationship. You’ll also need a release of information form which gives you authority to communicate with other health care providers when necessary. When it comes to forms such as these, it’s easiest to be guided by an existing template. These can be online or by speaking to colleagues who have already drawn up such documents.

Revenue and Accounting

When thinking about how to start a private psychotherapy practice, you need to consider how you’re going to do your books. In the ideal world, we’d all have qualified and well-paid office assistants who manage the books while we manage the patients. The truth, however, is that many therapists lack the financial flexibility to take on an assistant when they’re starting out. Initially, you’ll probably have to manage your own accounts and invoices. There are many resources available online, and this is another area in which guidance from colleagues can be very valuable.

Make Sure You Have a Website

Dear readers, we’re in the 21st century. It’s not impossible to get yourself established without touching a keyboard. But know that you’re probably shooting yourself in the foot if you’re not developing an online presence! Setting up a website is a great way to attract clients while also building a name for yourself.

Importantly, your website gives your clients a sense of who you are and how you work so that they can make an informed choice before making the trip to your consulting room. The added benefit of setting up a website is that, believe it or not, it promotes personal growth. Why? You are forced to clarify your own values and vision and explicitly state this for all to see.

Many of us shy away from the idea of posting our faces all over the internet. Clinicians often think that the idea of self-promotion contradicts their desire to help people. And yet, upon entering the world of private practice, it becomes apparent that the one (online marketing) is a precondition for the other (doing therapy).

Marketing is Essential

So, you want to know how to start a private psychotherapy practice in the most efficient way possible? Setting up a website is important, but don’t stop there: ongoing marketing is essential to your success as a therapist.

First off, consider printing business cards and brochures. Attend conferences and if possible give presentations. When it comes to your online presence, why not set up a Facebook business page and LinkedIn account? You may also want to consider investigating Google Adwords (to make sure that your name is coming up on google searches) and internet marketing strategies more generally. It’s also important that you list your practice on Google Maps so that clients are able to find your practice easily.

Start Part Time to Ease the Transition

For therapists who are wondering about how to start a private psychotherapy practice without sky-rocketing your stress levels, consider starting part-time. Why? The first thing to acknowledge is that by opening a practice you’re likely to incur significant expenses, many of which we have already mentioned to in this article. The most significant cost is likely to be your office rental – and the specific prices vary significantly depending on the sort of area that you’re looking to rent in.

However, apart from the office rental, you’ll need to fork out for insurance, business cards, domain hosting (if you launch a website), general advertising, utility costs, furnishing your space, basic office supplies, licensing fees and continued professional education. If you are just starting out and are not guaranteed access to an instant referral network, it makes financial sense to start part-time – perhaps one or two days per week. This will give you time to grow your practice, reputation, and referral networks without taking too big a risk.

All the while, you’ll (hopefully) have a supplementary income coming in. Psychologists are able to do far more than simply treat patients. For example, you could conduct research and lecture at universities; or you might host public workshops for the community, which also increases your visibility and may help attract clients. Some therapists choose to provide employee-wellness interventions for corporations. Others still find themselves writing about how to start a private psychotherapy practice (and other psychology-related content) on platforms like ThriveTalk!

What if the options mentioned above don’t appeal and you’re deadest on doing traditional clinical work? Work for an established practice. This will provide a more stable income while also giving you an opportunity to learn first hand about how a psychotherapy business is run. Do this part-time, so that you have the chance to start growing your own practice simultaneously. The point to consider is that you have options. You don’t need to put all of your eggs into one basket.

Take the Plunge and Start Making Your Dream a Reality

For the clinician who is wondering how to start a private psychotherapy practice and make it work, there is a lot to consider. From insurance and office rental to advertising and setting up a website, the range of non-clinical factors that need addressing can feel overwhelming. Don’t let this put you off! It’s certainly possible to make it work; and when it does, running your own practice can be an exceptionally rewarding experience.

author avatar
Angel Rivera
I am a Bilingual (Spanish) Psychiatrist with a mixture of strong clinical skills including Emergency Psychiatry, Consultation Liaison, Forensic Psychiatry, Telepsychiatry and Geriatric Psychiatry training in treatment of the elderly. I have training in EMR records thus very comfortable in working with computers. I served the difficult to treat patients in challenging environments in outpatient and inpatient settings
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