“What does it take to start a private psychotherapy practice?” I hear this question a lot (along with questions about setting up an LLC or just being a sole proprietor, how to do medical billing, how to get on insurance panels, what to charge for therapy sessions, whether to do sliding scale…). I think that when people are asking this, they are really asking how much MONEY does it take. Well, yes, you will need a little bit of money, but not as much as you think you might. AND, of course, it also depends on where your practice is located and other factors in your life.
Really, the biggest expense of starting a private practice is planning to support yourself while you are building your caseload. Obviously that varies tremendously depending on your personal circumstances and outside supports. But, realistically, I would recommend you plan for several months of limited income before you get your practice churning. Many people address this by starting a practice on the side while still working at a clinic. That is what I did, but I have to say: I didn’t build a real, thriving, sustaining practice until I had to. In other words, there is something to be said for the fire that is lit when you walk away from the “stability” of an agency and have to create your own stability.
The actual expenses of a practice can be quite modest. Furthermore, there are choices you can make as a therapist to limit those expenses in the beginning. This does not mean skimping and coming across as cheap (or having an office in an inconvenient neighborhood). What that can mean, though, is asking yourself, each time you are faced with a spending question: Will spending money on this make my practice more lucrative?
The answer to that question will sometimes be yes … as in the location of your office, investing in a decent, personalized website, or in hiring a business coach to guide you through the steps to achieve your goals so you don’t have to wander around trying to figure it all out on your own (and wasting time and money in the process). Later down the road, the answer might be yes to some questions that come up as “no’s” when you are just starting out: e.g. is it worth it to hire an assistant/ billing person? (This one in particular may be a yes at the get-go, but is an expense that can often be delayed.)
The other thing I would say to this is that time is also worth something as a practitioner and you should also ask yourself, is spending time on this going to make my practice more successful? If you are finding that you answer “I don’t know” to that question, you probably need to find someone who can help direct you toward productive activities and away from things that will just waste your time. AND, this too will evolve over time. For example, there was a time in my practice when it did make sense for me to do certain activities that I now delegate to part of my team. Now what makes sense for me is taking care of my current clients and cultivating relationships with referral sources. Everything else gets delegated.
Want to get to a place where you don’t have to deal with the billing, insurance BS, scheduling…? Keep reading. I will be back next week with more about the specifics of what your expenses are likely to entail when starting out.
Evan Center, LCPC
Owner/Founder
Center Institute
www.centerinstitute.com