Everything You Need to Start a Therapy Practice
Are you ready to venture into private practice? Counselors, therapists, and psychologists start a therapy practice for many reasons. Some want increased freedom from huge medical conglomerates. Others feel a private practice supports their community or clientele better than traditional systems.
But, establishing a therapy practice requires more than clinician skills. You’re setting up a small business and everything that goes along with it. Learn what steps to take to set up a private practice, from branding to budgeting. Then, take action to get your therapy practice up and running.
Starting a therapy practice: Ask questions and find answers
You likely know why you want to start a therapy practice. But, it’s vital to dig into your concept further. Learn about your ideal clients and competition so you can uncover ways that your business is different from others. Start with a few basic questions:
- What is your niche?
- Will you focus on a specialty like mental health care for women or LGBTQ populations?
- What is your reasoning behind your decision?
- Are your ideal clients underserved in your area?
- Will your location affect your client outreach efforts?
Write down any other questions that require further research. These may include concerns you have about funding your business, the amount of income you need for your personal life, and what types of support you need to start a therapy practice. Your list of questions forms a research plan.
Use research to answer your questions
Before creating an actionable business plan, you need information about your competition and clients. While doing research, you’ll also come across data that informs your branding and marketing strategy and gives you insights into pricing your services and choosing a location.
- Complete market research to determine what your clients need and want from your practice. Look for information that gives insights into the demographics and psychographics of your ideal clients.
- Gather competitive research to see who and what you’re up against. Create a list of therapy practices in your area and review their websites and social media. Analyze their use of SEO, messaging, and how both support their mission statement.
Now, use this information to develop your company’s key messages, mission statement, and points of differentiation. You can also use it to address possible limitations and research options for outsourcing tasks. For example, will you build your website or use a developer to get it up and running quickly? Should you invest in branding services to ensure consistent brand presentation? You may even decide that you need help with market and competitive research. Fortunately, you can outsource one or all of these tasks.
Enlist help for the legal decisions
Before beginning your new therapy practice, invest in legal assistance. You may be able to complete much of the work on your own, but it helps to have a legal opinion during the pre-planning stage. A lawyer familiar with mental health law informs you about requirements for starting a therapy practice like:
- State and local zoning laws that impact the location of your office
- Business license requirements for your state, county, or city
- The application process for a national provider number (NPI)
- Best business legal format (sole proprietorship, limited liability company (LLC), or corporation)
- Professional liability and malpractice insurance
- American Counseling Association Code of Ethics requirements for marketing and messaging
Formulate a therapy practice business plan
Your business plan is where you pull together your research and make decisions about branding, operating processes, and finances. Start with a basic business plan template. Fill in all the details, then make a note of sections where you need additional information. For example, you’ll want to develop in-depth documents to support your branding, marketing, and PR efforts.
Therapy practice overview
Develop an elevator pitch and a unique selling proposition (USP). These identify your services, clients, and what makes you different from your competition. Many templates designate sections for an executive summary and key talking points. This first section gets people excited about your business. They learn what your company is and how you’ll earn money.
Market and competitor details
Share details about the size of your market, the number of potential clients, and how that translates into revenue. You’ll also add information about economic conditions that impact your private practice and how you’ll navigate any barriers. Highlight direct and indirect competitors and how that factors into your strategy.
Organization of your therapy practice
List the legal format you’ll use for your therapy practice and include an organizational chart where necessary. If you’re a sole proprietorship and don’t plan on having employees, this section will be short. However, you’ll still want to include any professionals that’ll support business operations, including marketing agencies, legal services, and accounting assistance. If you have a business partner or employ administrative help, then show a chart explaining various job duties and the chain of command. Don’t forget to reference unique skills, licenses, or resumes for yourself and those who support your therapy practice.
Services your private practice offers
Provide detailed information about your therapy services and pricing structure. Add data about where and how you’ll perform these services, including telehealth and videoconferencing consultations. This section is also where you’ll include charts or supporting materials that explain how your pricing supports your financial outlook, compares to expected insurance payments, and so forth.
Marketing and sales plans
Use this area to explain precisely how you’ll find and keep clients. This section is lengthy, and many business owners develop a thorough communications plan as a supplement document. Consider what platforms you’ll use and include information that shows you understand and will implement the ACA code of ethics across your channels. Include details about:
- Platforms like your website and social media channels
- Local outreach and community efforts
- Networking via conferences and other avenues for referrals
- Methods of advertising for print and digital platforms
- Ways you’ll generate publicity
Support your plan by including examples of promotional print materials, statistics about your social media and email audience, and notes about your budget. Also, add data about your marketing goals, key performance indicators (KPIs), and how you’ll measure progress.
To start a therapy practice, use financial projections to detail how you’ll make money and where that income goes. Add several financial forecasts, then come back and revise your information as needed. Common documents include:
- Projected income and cash flow statements
- Balance sheets
- Capital expenditure budgets
- List of fixed and variable expenses
- Startup costs
- Forecasted one-year and five-year statements
Provide data about how you’re funding your business. You may include data about personal savings, potential collateral, and how you’ll pay back any investors or lenders.
Appendix with supporting documents
Complete your therapy business plan with supplemental materials that support your business idea. Depending on your needs, you may add further information about your personal credit history, background in therapy, or research studies.
Find a location before you start a therapy practice
If your ideal customers revolve around specific neighborhoods or locations, then start there. But, if you’ll offer online therapy sessions, then your site may not be as important. Yet, both online and on-premise sessions require a safe and confidential space. Key points of consideration include: Security. Your location should be safe and private for your clients as well as yourself. Inviting strangers into your home office or a vacant building poses extra security risks. Proximity to clients. Consider how your clients travel and how that impacts your private practice. You may want a location near public transportation or plenty of off-street parking. Image and credibility. Your location affects how people view the trustworthiness of your therapy practice. Think about how the physical appearance and signage impact your brand.Overall cost. Along with monthly lease or loan payments, consider how much money you’ll put into remodeling the space to fit your therapy practice needs.
Develop processes and find tools to start a therapy practice
Think about what happens when you get a new client. You’ll want to gather valuable information about your client while also sharing documents that outline your policies. Plus, you don’t want to waste time searching for client data or insurance reimbursement requirements. Outline your operations, then tweak your process and forms as you go.
Tools and support for your small business
From notetaking to tracking client information, software and tools help you organize data and keep track of goals. You may start with a simple spreadsheet system, but as your business grows, you’ll want to invest in management tools such as:
- Practice management software with online capabilities to put all your information into one spot, including payments, conversations, and scheduling.
- A small business phone system that supports multiple lines, call routing, call recording, and HIPAA-compliant video conferencing.
- A method for accounting, payroll, and insurance billing.
Private practice processes, forms, and policies
Don’t wait until your client asks questions, or you get burned with an unpaid invoice. Think about the various policies you need and the forms that support your requirements. Get legal assistance to make sure all documents meet HIPAA requirements and ethics standards, including: Payment policies. List accepted payment forms, including online and mobile options. Create a price list and think about if you’ll offer sliding-scale fees or discounts for multiple sessions. Cancelation policy. Give instructions about your cancelation deadlines and how clients can cancel an appointment (online, by phone, using an app). Privacy policies. Explain how you comply with HIPAA and protect client data. You will provide this to new clients and also include a copy on your website. Referrals. Describe your method for referring current clients over to a new therapist. It’s essential to be transparent to avoid charges of bias or unethical practices. Next, build a new client packet that includes the following forms tho support your process and policies:
- Client intake form
- Disclosure forms
- Informed consent
- Referral form
- Insurance reimbursement forms
- Client information forms
Pulling it all together to start a therapy practice
When you start a therapy practice, you’re investing in your future. But, you’re not only a psychologist — you’re a small business owner. Combining the two is often tricky and requires extra support.Prepare the basics of your business, then take action. Dive into marketing your psychology private practice and planning your launch strategy. Early preparation helps you face challenges and exceed client expectations.