Starting a private practice is like embarking on a new adventure; you aren’t sure exactly where this adventure will take you, but you know you’ll encounter new challenges, find new resources, and have brand new experiences.
Whether you are a travel junkie, a homebody, or something in between, you probably know that there is a key aspect to smooth adventuring: preparation and planning. It’s true for establishing a new business, and for branching out into private practice. You don’t need plan all the details out for a successful venture, but having a few of the big things figured out ahead of time will make the journey a lot smoother.
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What Qualifications & Licenses Do You Need?
This is a very basic first step, but it’s vital! You can’t start a private practice without the necessary qualifications to provide psychological services to your clients.
It may vary depending on where you live, but in general, you will need at least a master’s degree in psychology or a related field in order to work with clients or patients. There are several majors or areas of concentration to choose from, including social work, school psychology, clinical psychology, and many more.
If you are interested in starting a psychology practice, in particular, you’ll probably want to go the psychology major route. Once you have your bachelor’s in psychology, you can move on to getting a master’s or a Ph.D. in psychology. Once you have the necessary degrees under your belt, you’ll need to complete an internship and, finally, apply for licensure in your state, territory, or country.[1]
Moving from the world of employment to independent practice can be scary and confusing, but also very rewarding. You’ll need to do a lot of research, tons of planning, and prepare yourself for even more paperwork.
Starting Your Psychology Private Practice
If you’re already familiar with the licensure and qualifications necessary to practice as a psychologist, but you’re wondering how to go about starting your own private practice, you can jump in here.
Moving from the world of employment to independent practice can be scary and confusing, but also very rewarding. You’ll need to do a lot of research, tons of planning, and prepare yourself for even more paperwork.
Let’s start with a simple checklist.
How To Start Your Mental Health Practice: A Checklist
Once you have the very basics figured out (e.g., education, license, any other necessary qualifications), you’re ready to begin planning out your practice.
Here’s a handy checklist to help you get started:
- Have a business plan in place
- Designate your workspace
- Outline your practice’s policies
- Check out insurance provider panels
- Choose your private practice software/platform tool(s)
- Build your paperwork library
- Market your practice
Making A Business Plan: 2 Examples
You might not think you need a business plan as a helping professional, but it’s highly recommended that you create one. It can’t hurt to have one in place, and it will act as a helpful guide as you establish your business and get it up and running.
When drafting your business plan, make it as detailed as possible. It needs to cover the basics: what your business does, how it does it, and why it does it.
Recommended: Business Coaching: What It Is, Who Needs It, & How It Works
Nothing in your business plan is set in stone—after all, you can always update your plan to suit the reality of your practice—but it should be a detailed, in-depth resource on how you intend to run your practice.
Private Practice Business Plan Template
Your plan should include:
- How much money you need to make each year to keep practicing.
- How much you need to bring in each year to live the life you want.
- Financial goals (e.g., earning enough to rent a better office space or hire a second therapist).
- Your marketing plan.
- 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.
- Funding options (e.g., your own personal savings, potential investors, loans).
- A loan repayment plan (if you need a loan).[2]
Example Business Plan: Psychology Private Practice
The Business Plan Shop offers a great example of a practical outline for a straightforward but comprehensive business plan.
Not all sections may apply to you, but it offers a good template:
- Executive Summary (e.g., business overview, market overview, financial highlights)
- Company (e.g., structure, history, location)
- Products and Services
- Market Analysis (e.g., demographics, market need, regulation)
- Strategy (e.g., pricing, marketing plan, milestones)
- Operations (e.g., personnel plan, key assets, and IP)
- Financial Plan (e.g., start-up funding, assumptions, forecast)
- Appendix[3]
If the idea of a one-page business plan sounds good to you, Power Diary also offers some examples to help you craft your short and sweet, actionable business plan.[4]
9 Best Practice Management Software Systems to Use
When you have a business plan in place, a designated space for your practice, and some policies and procedures lined up, you have one important step to go before you can start marketing and taking on clients: you need to choose a practice management software.
Good practice management software will make your life in private practice much easier.
It should be able to help you with some of the most important but cumbersome parts of running your practice: creating and administering treatment plans, bringing new clients on board, invoicing and billing, documentation, scheduling, and more.
Fortunately, you have tons of options to choose from. There are a wide variety of software solutions that can help you manage your practice, and they offer an even wider variety of features.
Nine of the best solutions currently available are outlined below, but there are many more options a quick web search away.
| Solution | Details |
|---|---|
 | Power Diary includes features like:
|
| Name | Power Diary |
| Price | $5 – $60/week |
| Good For | Coaching Management, Practice Management, Physical Therapists, Occupational Therapists, Speech Therapists, Mental Health Coaches, Wellness Coaches, Business Coaches, Counselors, Teletherapists, E-counselors, Online Coaches |
| Website | https://www.powerdiary.com/ |
| Solution | Details |
|---|---|
 | Simple Practice includes features like:
|
| Name | Simple Practice |
| Price | $39 – $59/month |
| Good For | Coaching Management, Practice Management, Digital Health, Telehealth, Telepsychology, E-Mental Health |
| Website | https://simplepractice.com/ |
| Solution | Details |
|---|---|
 | Quenza includes features like:
|
| Name | Quenza |
| Price | $1/month and up |
| Good For | Treatment Planning, Care Management Software, E-Psychology, E-Therapy, Online Coaching, Therapists, Psychiatrists, Counselors, Telepsychiatry, Teletherapy |
| Website | https://quenza.com/ |
| Solution | Details |
|---|---|
 | TherapyNotes includes features like:
|
| Name | Therapy Notes |
| Price | $49 – $59/month |
| Good For | Coaching Management, Practice Management, Digital Health, Telehealth, Telepsychology, E-Mental Health, Mental Health Coaches, Wellness Coaches, Business Coaches, Counselors, Teletherapists, E-counselors, Online Coaches |
| Website | https://therapynotes.com/ |
| Solution | Details |
|---|---|
 | Kareo includes features like:
|
| Name | Kareo |
| Price | $80/month and up |
| Good For | E-Therapy, Telehealth, Private Practice Software, Customer Relationship Management, Physical Therapists, Occupational Therapists, Speech Therapists, Mental Health Coaches, Wellness Coaches, Business Coaches, Counselors |
| Website | https://www.kareo.com/mental-health/ |
| Solution | Details |
|---|---|
 | Solution includes features like:
|
| Name | Coaching Loft |
| Price | Free – $95/month |
| Good For | Coaching Management, Mental Health Coaches, Wellness Coaches, Business Coaches, Counselors, Practice Management, Teletherapists, E-counselors, Online Coaches |
| Website | https://www.coachingloft.com/ |
| Solution | Details |
|---|---|
 | Solution includes features like:
|
| Name | BestNotes |
| Price | $50/month and up |
| Good For | Therapy Notes, General Healthcare, Telepsychiatry, Physical Therapists, Occupational Therapists, Speech Therapists, Mental Health Coaches, Wellness Coaches, Business Coaches, Counselors |
| Website | https://bestnotes.com/ |
| Solution | Details |
|---|---|
 | TheraNest includes features like:
|
| Name | TheraNest |
| Price | $39/month and up |
| Good For | Practice Management, Physical Therapists, Mental Health Coaches, Wellness Coaches, Counselors, Teletherapists, E-counselors, Online Coaches |
| Website | https://theranest.com/ |
| Solution | Details |
|---|---|
 | Solution includes features like:
|
| Name | Therabill |
| Price | $149/month and up |
| Good For | Practice Management, Physical Therapists, Mental Health Coaches, Wellness Coaches, Counselors, Teletherapists, E-counselors, Online Coaches |
| Website | https://www.therabill.com/ |
A Note on Opening A Group Practice
So you’re thinking about starting a group practice?
There are additional pros and cons to starting a group practice, aside from the pros and cons of starting an independent private practice. You get to share the burdens of running a business, but you also have increased risk and complexity as you add business partners.
Therapist Amanda Ruiz notes that you should be asking yourself six questions before opening a group practice:
- Should I start a group practice? (aka, why do I want to start a group practice, what do I hope to gain from it)
- Do I have a system in place?
- Should I write a business plan?
- Should the group specialize?
- Do I want to accept insurance?
- Should I hire IC vs. W-2?[5]
You should be able to provide firm answers to each of these questions before starting your group venture.
Make sure you give some thought as to why you want to add more providers to your practice, whether you have a solid system in place that can handle additional providers, and where you plan to go with your group practice.
6 Helpful Books About Starting a Private Practice
If you want a more in-depth guide to starting your psychology private practice, there are several books that may help.
Here are the top 6:
- Getting Started in Private Practice: The Complete Guide to Building Your Mental Health Practice by Chris E. Stout and Laurie Cope Grand
- How to Thrive in Counseling Private Practice: The Insider’s Guide to Starting and Growing a Therapy Business by Anthony Centore
- Book Yourself Solid by Michael Port
- Private Practice Essentials: Business Tools for Mental Health Professionals by Howard Baumgarten
- Be a Wealthy Therapist by Casey Truffo
- Starting Your Private Practice: A Step-by-Step Guide for Mental Health Counselors by Maryanne L. Duan
Final Thoughts
It can be nerve-wracking to start your own psychology private practice, but with a little forethought and some planning, you’ll be ready to open your (physical or virtual) doors and start changing lives, one client at a time.
Refer to the checklist in this piece to get started, and don’t forget to check out the many resources peppered throughout. There’s no such thing as being too prepared when it comes to establishing your own practice!
If your goal is to improve your clients’ mental health from your own private practice, our $1 Quenza trial will give you everything you need to get started.
Don’t forget to try our software for 30 days of unlimited access to all the tools that will help you share unique, effective treatments and streamline your patient experience, so that you can make a difference with professional blended care.
References
- ^ All Psychology Schools. (n.d.). Learn how to become a psychologist. Retrieved from https://www.allpsychologyschools.com/clinical-psychology/how-to-become-a-psychologist/#:~:text=To%20start%20a%20psychology%20career,and%20fulfill%20other%20licensing%20requirements
- ^ Good Therapy. (2020). Your checklist for starting a private practice in counseling. Retrieved from https://www.goodtherapy.org/for-professionals/business-management/private-practices/article/your-checklist-for-starting-a-private-practice-in-counseling
- ^ Business Plan Shop. (n.d.). Practical example of a business plan outline. Retrieved from https://www.thebusinessplanshop.com/blog/en/entry/business_plan_outline
- ^ Power Diary. (n.d.). Creating a business plan for your psychology private practice. Retrieved from https://www.powerdiary.com/us/blog/creating-business-plan-psychology-private-practice/
- ^ Ruiz, A. (2019). 6 questions to consider before starting a group practice. Retrieved from https://www.simplepractice.com/blog/6-questions-to-consider-before-starting-a-group-practice/
