Opening a private practice is a significant milestone in many psychologists’ careers. It’s an adventure that allows you to put your years of training to use and help people while operating on your own terms. You’ll be your own boss, make your own schedules, and have more autonomy over your practice.
However, success in private psychology practice doesn’t just depend on your level of training or experience. You’ll need to combine your clinical knowledge with the business aspect of your practice. Just like every other type of business, running a private practice has its challenges, especially during the initial years. It requires a lot of hard work since you’ll most likely be working long hours. And you will hold more responsibility and liability compared to other professionals who work on teams at hospitals, outpatient clinics, and nursing homes.
To be successful in your private psychology practice, you need to be prepared from the onset. This guide will show you how to start a private psychology practice.
1. Licensure and Experience
Before starting a private psychology practice, you need the right qualifications. The licenses you require may vary depending on the state you reside. Generally, you’ll need at least a master’s degree in one of the major areas of psychology, such as clinical psychology, social work, or a related field, and an internship. After completing your training, you can finally apply for the necessary licenses in your state.
Consider joining a group practice or working in a medical setting or community agency to gain experience, connect with colleagues, and see how to run a business. Alternatively, you can speak with those already running their own practices to understand the dynamics of private psychology practice. When you have a sense of the realities of psychology practice, you’ll know how to run your own practice differently and position it for success.
2. Develop a Business Plan
Like every other business, you need a solid business plan to run a successful private psychology practice. Your business plan will serve as a blueprint and help you define various aspects of your business (like your mission statement and values) and make crucial decisions in line with your goals. Your mission statement should say why you want to run a private practice, the target clients you hope to serve, and how you plan to help them.
Also, your business plan should capture the financial aspects of your practice. Consider how you intend to fund your practice and the minimum amount of revenue you’ll need to generate yearly in order to keep your business running. Set your financial goals for the first few years of your practice and consider how you intend to manage your funds. If you’re hiring a financial manager, you should factor in their salaries and the salaries of your other employees.
3. Carefully Select a Location
Nowadays, most psychologists running their private practices offer virtual therapy sessions. But even if you provide such services in your practice, you should choose a physical location where your clients can easily visit for in-person sessions. When selecting a location for your practice, look for a place where it will be easiest to meet your target client base.
According to Sachs, an addiction treatment marketing group, ”Given the life-threatening characteristics of mental illness, drug addiction, alcoholism, and other dependency-related issues, the ability to reach clients at that moment in their lives when they are most likely to be receptive to help is of paramount importance.”
So, your office should be accessible, and its environment should be safe, comfortable, and free of loud noises. Consider using calming colors and getting cozy and inviting furniture. You could even include elements of nature like potted plants or images of nature to add life to your space.
Consider the Legal Requirements
Select the best business structure that suits your needs and provides you with the type of liability protection your practice requires. A limited liability corporation (LLC) is the most popular business entity for a private psychology practice. This business structure offers a lower liability risk when compared with a sole proprietorship. Also, LLCs don’t require business owners to pay corporate taxes.
Some private psychology practitioners opt for S corp structures for their organizations. An S Corp is an elected tax status that allows therapists to operate like LLCs; however, the profits and losses are considered separate from the practitioner. You should also look for suitable insurance coverage for your practice. Generally, it’s best to enlist the help of an attorney when deciding the best structure and insurance coverage for your private practice.