How to Start Your Counseling Private Practice 101

Private Practice Counseling

There are multiple reasons to venture out and create your own counseling private practice, but there are also many things to consider. You will be taking on more risk, subjecting yourself to more instability and uncertainty, doing more paperwork, and probably paying higher taxes and fees than you’re used to.

So, if you’re wondering how to start a private practice in counseling, do your research on what that entails—and this piece is the perfect place to start.

Checklist For Starting Your Private Practice: 8 Steps & Requirements

The steps required to start your own counseling or psychology private practice will vary based on your goals, country, and state or territory. Nevertheless, there are some steps that are pretty universal.

We’ll cover the basics for starting a private practice in the United States, so make sure you dig into the details if you reside outside the USf.

Starting a private practice in counseling checklist should include these basic steps:

  1. Learn about the many legal requirements for starting your own counseling private practice.
  2. It’s good practice to get insurance to cover professional indemnity, in case you are sued. If you plan to meet clients in person, you’ll also need third-party cover or public liability in case someone is injured at your office.
  3. Create a detailed business plan and define your unique selling point for the niche target customer you want to market to.
  4. Secure office space (if needed) and/or designate and prepare space for your home office.
  5. Consider joining insurance provider panels to have access to more potential clients.
  6. Determine and delineate clear practice policies.
  7. Create or adapt the therapy forms your clients will complete to work with you.
  8. Ensure you have the right license for the US State you plan to target. In other countries, for example, the UK, therapy and counseling are not regulated. In that case, it’s good practice to join one of the key governing bodies to give you credibility.
  9. Consider outsourcing your accounting, tax, and legal requirements.
  10. Get to work![1]

Legal Requirements

From documentation and billing software to form templates and everything in between, there are software solutions for your private practice needs.

There are many different laws and regulations you’ll need to understand before opening your own private practice.[1]

  • State and local zoning laws may limit where you can practice.
  • Whether or not you need a business license.
  • How best to incorporate your business as a separate entity.
  • Malpractice and professional liability insurance.
  • Scope of practice concerns.

While setting up a sole proprietorship is one of the easiest processes, you might prefer to go for a Limited Liability Company (LLC). One of the main advantages is that it protects your personal assets, such as your house, without necessarily incurring corporate taxes.

Of course, you also have the partnership structure if you plan to go into business with someone else. Either way, be sure to consult a professional or research your options before committing.

Business Plan

Whether you’re starting a counseling or psychology private practice, your business plan should be as detailed as possible. Concurrently, ensure you allow for it to evolve as you get feedback from the market. 

According to experts at Good Therapy, your plan should include:[1]

  • How much yearly income you need to keep practicing with a decent living.
  • Clear financial goals, including your own private practice therapist salary and stretch goals to earn enough to hire a second therapist.
  • A marketing plan which includes details of your ideal client as well as your specialty niche. Although, stay flexible and let this plan evolve as you work with your own barriers and limiting beliefs to attract the right clients for you.
  • A communications strategy plan to determine how you’ll get yourself known and what mode of communication works for your niche.
  • Goals for the first months, first year, and first 5 years. This enables you to track your progress and assess whether your plans are realistic as you hit various benchmarks.
  • A loan repayment plan, if you need a loan.
  • Funding options. For example, do you have savings that can help fund your marketing costs?

Office Space

If you’re planning on having a dedicated office space outside your home, you’ll need to determine whether you go out to find a space or rent it out.

Therapist consultant Joseph R. Sanok recommends working with an established counseling private practice as you begin yours, subleasing or renting out their space on their off-hours.[2]

Insurance Provider Panels

If you want to make it easy to get new clients, one of the best ways is to join the provider networks of your area’s largest providers.

Basically, this means that the insurance company has vetted you and determined that you’re a good provider to refer their members to.

Although, for coaches without a specific therapy background, you can also investigate EAP (Employee Assistance Programs) services companies.

Create Clear Policies

This is a vital step that will save you heartache if undertaken before you start bringing on clients.

Essentially, you’ll have all the information to hand when clients cancel at the last minute or ask for a special discount, for example.

Overall, here are some core policies to consider for your counseling private practice:

  • Your rates
  • How you’ll accept payment (including insurance) and process encounter forms
  • Confidentiality and privacy policies
  • Release of information policies
  • Policies to protect your safety and your clients’ safety
  • Social media policies
  • Appointment scheduling and cancellation policies
  • Policies on when and how you will refer clients to another provider

Gather Your Forms

As mentioned, one major downside to starting your own counseling private practice is the huge increase in paperwork.

Not only will you need to file business-related paperwork but you’ll also have legal documentation such as ownership certificates, “safety in the office” checklists, and more. In addition, there are forms to gather information from your clients as well as your progress notes to file properly and securely.

According to therapist Anthony Centore, you’ll likely need at least these 7 forms, if not more:[3]

  1. Counseling client intake form
  2. Counseling informed consent form
  3. Simple counseling receipt for services
  4. PHI release form for psychological testing
  5. Counseling HIPAA release form
  6. Notice of privacy practices
  7. Sample business associate agreement

As a counselor, you’ll be responsible for storing your forms securely. Essential HIPAA-compliant software, like Quenza (pictured), is a guaranteed way to ensure your patient data remains legally protected.

screenshot of Quenza HIPAA compliance agreement in app
HIPAA-compliant software like Quenza (pictured) is a guaranteed way to ensure your patient data remains legally protected.

As you can see in the screengrab, digital practice forms can be shared with clients through a private portal on their phones. HIPAA-compliant private practice software for counseling will also send you the resultsoften in real-timein an encrypted format.

Marketing Your Business

Outreach programs are a good way to target specific client groups that your practice wants to reach and can be put together from material that you already have on hand.

If you want to bring in more clients for your new counseling private practice, you should also leverage today’s digital network. Creating your own website and content is one of the most powerful ways to get your name out there. Using social media and creating a solid network of clients that can provide referrals is also a solid approach.

Another option is to leverage outreach programs. This involves sending out relevant health information from your counseling private practice to your community. It’s a great way to stay in touch with potential clients while raising your brand awareness.

For instance, a mental health counselor might market their private therapy practice with a wintertime campaign about Seasonal Affective Disorder.

screenshot of outreach program for therapy clients in Quenza
Outreach programs are easy to run with the right software and can be used to build awareness about your practice (pictured: outreach program in Quenza client app.)

Outreach programs target specific client groups and are easy to run with the right software (see above: Quenza client app). Moreover, they can often be put together from your pre-existing materials with the help of highly intuitive specially-designed therapy apps.

Get to Work!

Most importantly, you now need to provide high-quality services to your clients. This might sound like an obvious point but it’s still vital. Without quality, for private part aspect. Nevertheless, your private therapy practice will sink.

So, you could file all the paperwork perfectly, assemble the best and simplest forms, and get on every major insurance company’s panel. Regardless, without good services, your clients won’t come back.

Furthermore, keep in mind that as a counselor in private practice, you’ll need to put in a little more legwork to keep in touch with industry trends. In short, you won’t have mandatory company training to attend or coworkers to pick up new techniques and ideas from. That’s why networking and learning new research is a must to keep your counseling private practice ahead of the curve

Making A Business Plan: An Example

If you’re not a business-savvy provider and you’re wondering how to create a business plan for your counseling private practice, you’re not alone! Most mental health care providers are not businesspeople by design; they’re helpers, not entrepreneurs.

But there are some simple guides available to you. For example, the Practice of Therapy website has outlined the following steps:[4]

  1. Create a mission statement and vision for your counseling private practice.
  2. Set your financial goals, for example, your ideal private practice LCSW salary (Licensed Clinical Social Worker) or private practice LMHC salary (Licensed Mental Health Counselor). This might differ if you are a therapist, counselor, or mental health coach.
  3. Determine your Key Performance Indicators, or KPIs (e.g., number of sessions held, monthly revenue, etc.)
  4. Identify your business expenses and decide how you’ll track them.
  5. Plan your cash flow (e.g., take into account seasonal and cyclical variations in treating clients).
  6. Create a budget and determine how you’ll monitor it (e.g., weekly or monthly balancing).
  7. Develop a marketing plan with your ideal client and niche fully detailed.
  8. Create a growth plan (i.e., a plan to continue investing in advancing and growing your practice as well as yourself).

To see an example business plan for a counseling private practice, check out this sample from Profitable Venture. It includes all the relevant information you’ll need to create your own plan.

6 Valuable Forms for Your Counseling Private Practice

Your private practice will need to gather a lot of information from clients, meaning you’ll need to collect and create a variety of simple, easy-to-use forms.

From onboarding and assessing to goal-setting, treatment, and discharge, digital counseling forms can now all easily be designed, branded, personalized, and shared using practice management software for therapists:

image of client using Quenza to complete a form on tablet client app
Online forms can be designed once, and then personalized using software like Quenza to relate to clients individually.

The above picture shows our client receiving a goal-setting survey that we designed earlier using a therapy form template

You’ll see that we modified it to suit their specific counseling program.

Below you’ll find a few templates you can adapt to use in your own practice but check them first for completeness. More specifically, you may need to collect different kinds of information for your specific practice.

Smart Solutions: 6 Billing and Documentation Software Options

Now that you know the basics of getting your counseling private practice up and running, it’s time to think about how to make everything run a little smoother. Although you can probably handle things on a case-by-case basis for a while, you’ll eventually need to find ways to streamline your practice.

Luckily, there are already tons of resources out there to help you with this. Given the huge trend towards private practice and freelancing, it’s no surprise that hundreds—maybe even thousands—of companies have sprung up to offer business solutions.

Here are just a few of the many options available for you to expand and improve your private counseling practice:



Quenza app for Private Practice Counselling blue white logoCounseling private practice software Quenza offers:

  • Appointment scheduling and reminders
  • Custom activity builders
  • Care pathway tools
  • Initial assessments
  • Self-service portal
  • Treatment plans
Price$1+ monthly
Good ForSolo counselors, coaches, therapists, psychologists, psychiatrists, and other mental health care providers
More infoQuenza



TherapyNotes logo green blue whiteIn Therapy Notes, you’ll find:

  • Appointment scheduling and reminders
  • Claims management
  • Medical billing
  • Initial assessments
  • Self-service portal
  • Treatment plans
NameTherapy Notes
Price$49+ monthly
Good ForPrivate practitioners with many clients
More infoTherapy Notes
Simple Practice logo white background blue butterflySimple Practice combines:

  • Appointment scheduling and reminders
  • Claims management
  • Medical billing
  • Initial assessments
  • Self-service portal
  • Treatment plans
NameSimple Practice
Price$39+ monthly
Good ForPrivate practice counselors, therapists, psychologists, and health and wellness providers
More infoSimple Practice



TheraNest logo green blue whiteTheraNest gives you:

  • Billing and invoicing
  • Payment processing
  • Online prescribing
  • Video conferencing
  • Therapy notes
  • Client portal
Price$39+ monthly
Good ForPrivate practice counselors, therapists, psychologists, counseling centers, social service organizations, mental health agencies, large practices
More infoTheraNest



Power Diary logo black letter P blue letter DPower Diary’s features include:

  • Calendar Management
  • Appointment reminders (SMS and email)
  • Treatment note templates
  • Client invoicing
  • Online booking
  • Secure client messaging
NamePower Diary
Price$10+ monthly
Good ForPrivate practitioners up to large practices
More infoPower Diary



clinicsource logo pale bue grey and whiteClinicSource helps you with:

  • Therapy scheduling and built-in reminders
  • Templates for therapy notes, treatment plans, and more
  • Billing and invoicing
  • Practice management tools
Price$61.95+ monthly
Good ForMental health providers in a practice of any size
More infoClinicSource

Final Thoughts

While it can be overwhelming to start building your own private counseling practice from scratch, rest assured that there are many resources that can guide you on your path. From documentation and billing software to form templates and everything in between, there are multiple solutions for your private practice needs.

Happy practicing!

If your mission is to help others improve their lives with better mental health, don’t forget to check out Quenza, our private practice software for counselors.

Quenza’s specialized blended care tools feature everything you need to be successful as a therapist. You’ll be able to find the right blend of customized and pre-designed materials to build engagement, trigger positive change, and enhance your patients’ mental health for the long run.


About the author

Courtney is currently working as a healthcare workforce researcher for the state of California and is a regular contributor to the Quenza blog. She has a passion for taking research findings and translating them into concise, actionable packages of information that anyone can understand and implement.

Leave a reply

Your email address will not be published.