4 Steps for Therapists to Opening a Private Practice in 2023
The most overwhelming part of your practice-building journey? The beginning. Starting a practice can feel like one of the most chaotic times of your entrepreneurial journey (initiation by fire!). There’s so many moving pieces and often you are working full time and juggling your home life at the same time.
To give you a snapshot, I very much remember that feeling.
I was working almost 60-hour weeks, seeing 80-90 clients a week and commuting 2 hours a day to my full-time job. Time was not on my side but I was determined to not do this forever and knew this was my chance to get out of a very broken mental health system and have full reign of how I’m doing things.
I’m either leaving the mental health or I’m going into private practice full time.
I chose the latter and I’m very happy I did. So here’s a few steps to get you started, if you plan on opening your practice in the near future.
4 Steps to Starting Your Private Practice
1. Know the Vision of What You’re Building for your therapy private practice
As a dreamer this is my favorite part and honestly one of the most important pieces in building your practice. I want you to stop looking around at what everyone else is doing and get crystal clear on what your dream is.
Want to work three days a week?
Make six figures?
Only work when your kids are in school?
Have a mix of 1-1 therapy clients, run an online course and write a book?
Open a group practice?
Speak on stages?
Be super intentional and genuine to what your heart and spirit is calling for you to do and fiercely protect this vision.
Don’t let others talk you out of it, or tell you it’s not possible. I’ve worked with therapists and helped them achieve things way beyond what they could’ve predicted. If they are able to do this, so are you.
2. Register the Business for your therapy private practice
Once you know the vision of your practice it’s time to register the business. Here’s a couple of things to consider when registering the business:
What’s the name of your practice going to be?
This takes some time to come up with. If you feel really stuck you can always do your name and change it later using a “DBA” if you want to. For example: Danielle Swimm LCPC, LLC is a very common practice name for therapists
To be honest, we all get hung up on what our practice is going to be called and most clients won’t even know your practice name. 5 years later and I’m not sure if any of my clients know my practice is called Collide Behavioral Health. They just know I’m their therapist.
I chose Collide because I knew I was going to work with eating disorders and saw my practice as a collision between nutrition and mental health services, as one day I planned on hiring a registered dietitian.
You’ll want to see if the domain name is available for your practice name. For example, when I was going to name my practice Collide Behavioral Health I checked godaddy.com to make sure the domain was available to purchase before registering the company name. If your website domain is taken you can play around with using “.co” instead of ‘,com’ or go with a different name.
Next you’ll want to contact an accountant and ask them what legal entity they recommend you register your practice as. For most states in the US you’ll register your practice as an LLC but there are certain states (like California) where therapists cannot do this. Post in a local therapist facebook group asking what accountant they use their practice and ask for a consultation because you are opening your practice. Most offer this for free.
For most states you can easily register the business yourself. Simply google “How to Register a Business in ____ (insert your state)”. You’ll likely be taken to your state’s Business Express webpage.
Google will suggest Legal Zoom and this is a service you can look into and use if you decide to but for both companies I’ve started (my practice and Entrepreneurial Therapist) I've registered them myself and never had to use Legal Zoom. It’ll save you money if you can do it yourself.
3. Open a Business Bank Account for your counseling private practice
It will take about 4-6 weeks for the business to become registered once submit all the paperwork. Once you get the notice and certificate that you’re registered, celebrate! You are officially a small business owner! This is a big day.
Once you have it official that your practice is open you’ll want to do two things (after the celebratory champagne toast of course):
You’ll want to register the EIN through the IRS website (if your practice is operating in the United States). An EIN stands for an Employer Identification Number and you can think of it as the social security number for your practice. You’ll need this before you can open your bank account. Here it the link on how to apply for an EIN
Once you have an EIN from the IRS you’re good to go! Now it’s time to open your business bank account.
→ Do some research on which bank you want to use. It doesn’t have to necessarily be the bank you personally use for your finances. You want to shop rates and try to avoid any monthly fees.
I always recommend going with a Credit Union if you can because they tend to have no monthly fees and no requirements on a minimum balance.
Pro tip: Make sure you’re opening a business bank account and business savings account. We want to keep all finances separate from here on out to make tax time easy for you.
4. Have a number, address & liability insurance for your therapy private practice
Now let’s dive into the logistics of starting your practice.
What number will you give you for clients to call?
Decide what number you’re going to give out for new clients to call to book an appointment with you. There’s a couple options you have here:
You could use a Google Voice Number but I recommend using the paid version so it’s HIPPA compliant. If you want more information about making Google Voice for your practice check out this article.
I ended up buying a separate phone at Target (it’s a Consumer Cellular phone that is super cheap) and I’ve used this when giving out a work number. I really wanted a separate phone I could put away when I wasn’t working and it worked out great and did not cost much.
You can use your personal number. But be wary of this because you’ll never really feel ‘off the clock’. Clients will text you or call you on the weekends and holidays. Also, if someone has your personal cell they have more potential to find your home address that it is tied to.
Most therapists in 2023 are starting their practice using telehealth. This really helps keep the cost down when you are starting a practice. I also love this idea because you can easily see a 5:00 and 6:00 session after getting off your full time job and are building your practice, without driving to a separate office.
If you decide you want to start off using an office, it’s very do-able. Just keep the cost low by subletting an office 1-2 days a week max until we can fill those office hours and then expand to having one full time if you decide you want that.
If you’re one of the many therapists who is starting out with a virtual practice look for a local PO Box you can use for the address of the business. This is where it can get tricky because many states (including my own) won’t let you use a PO Box to register a business.
So you’ll need to find a virtual mailbox that is close to your house, because you’ll be driving there to pick up mail. I found one not far from my office that uses “Suite 200” instead of #200 or PO Box 200. The state liked this and allowed me to do this when registering the business.
Liability insurance is going to be your biggest expense as a start up because most of them have you pay annually for the liability insurance.
You can estimate your annual fee for your liability insurance can be anywhere from $600-$900 a year depending on where you live and your license.
If you are more than 3 months out from starting your practice, start saving for this now so you easily pay for it when the time comes.
Phew, we got through a lot. I know the admin stuff of getting a business up and running is tricky and not very exciting but you only do it one time and then you’re good to go!
If you want the full 10 step roadmap on starting your practice in 2023 I recommend taking my mini-course Practice Prep: the 10 Step Roadmap to Starting Your Dream Practice.
You can get it for as low as 3 payments of $70.
Hi- I’m Danielle Swimm,
a Business Coach for Therapists
I’ve helped hundreds of ambitious therapists like yourself start, grow and scale their private practice. I love being a therapist, but hate the rhetoric that you need to sacrifice your energy and income to help your community. Let’s build your dream practice that allows you to make six figures and live the life you’ve always dreamed of.
