How To Set Up An Individual Therapeutic Practice For Mental Health

There are many benefits to opening an individual practice, and many licensed professionals choose to work for themselves rather than an outside organization. A 2015 report courtesy of the American Psychological Association (APA) states that 44.7% of licensed psychologists in the US worked in their own practice.

How to start an individual therapeutic practice for mental health

Starting an individual therapy practice involves several steps, from obtaining the necessary qualifications to setting up the business itself. Before you get started, be sure to double-check the licensure requirements for practicing in your region. States sometimes vary on how many hours of supervised experience and continuing education you must have to receive your license according to your field of focus and the type of degree you’ve earned. 

As you grow, you may notice that these steps won’t always be linear in fashion. For example, networking and marketing will likely continue throughout the development of your practice. From establishing your payment systems to creating a system for filing your taxes, it’s often an ongoing process that requires flexibility and critical thinking. 

Here are some suggestions for how to start a successful individual practice the right way:

Establish your niche as a therapist and name your practice

Many professionals already know the type of therapy they’d like to specialize in and the type of clients they want to reach before establishing their individual therapy practice. You may have chosen a concentration in school that aligns with your interests and passions, or you might have worked in an organizational setting where you developed a specific area of expertise. Regardless of the path that’s led you here so far, you’ll likely want to determine the type of client base you’ll focus on helping— those people will be your target audience when marketing your practice.

Now may be an excellent time to determine an appropriate name for your practice, as you’ll need to register your business under that name. There are many factors to consider when coming up with a name that reflects your values and how you’ll serve your clients:

• What is your area of expertise, and who are your clients? Try to establish a name that lets potential clients know your focus upfront. 
• Is your name developed for long-term success? Consider a name that will grow with your practice. Avoid using your personal name or specific phrases/terms that can limit your scope as you expand in the future.
• Is your name clear, brief, and straightforward?
• Is your name professional and ethical?

Fulfill legal requirements whether you practice cognitive behavioral, family therapy, or talk therapy

Before you begin seeing clients, it’s essential to take care of the legal and regulatory requirements for your area. Failure to do so can prevent you from doing business and, in the very worst-case scenarios, result in revocation of your license. Legal requirements may include:

• Legal structure: Decide on the business structure for your practice (e.g., sole proprietorship, partnership, LLC) and register your business with the appropriate local authorities. Many independent professionals choose to work with a CPA or business advisor to determine the best option. 
• Licensing: Every business owner must acquire a business license adhering to local guidelines. 
• Insurance: Professional liability insurance might not be mandatory in your state, but it’s a must to protect you from potential lawsuits. 
• Client discretion and other healthcare regulations: Establish protocols to keep clients' information safe as required by law. This may include putting operational procedures in place to ensure your patients sign all documents authorizing treatment and that patient files are safely stored. If you employ staff, ensure they understand and adhere to these operational procedures. 
• Continuing education: Stay updated with the latest research, techniques, and regulations through workshops, seminars, and further education. Not only do many states require set hours of continuing education for therapists to fulfill, but it’s also a critical part of growth and competency. 

Establish a business plan

A thorough business plan should set you up for success and integrate your values and intentions with practical aspects such as budgeting and marketing. An effective business plan includes:

• A vision and mission statement outlining aspects of why you’ve chosen your area of practice, who you serve, why you’ve opened your own practice, and how what makes your practice unique. An appropriate vision statement should communicate your long-term goals.
• Pricing, budget, and financial projections based on market competitiveness and available data for prospective clients in your area. 
• A strategic marketing plan to attract new clients. This might include sharing your information and showcasing your expertise via your website, blog, social media, and email newsletters. Marketing may also involve engaging in networking events, joining professional associations, and building relationships with other therapists, businesses, and healthcare organizations who may refer clients.

Create a financial plan and acquire funding

There are many potential costs associated with opening an individual therapy practice. Projected expenses include, but aren’t limited to:

• Tax and insurance obligations
• Professional fees (if you hire a financial, marketing, or business planner)
• Marketing costs
• Software and technology
• Office space, office furniture, and utilities (if you choose to run an in-person practice)

Once you’ve established an estimate of your projected expenses, establish your projected income and outline a pricing strategy. At this point, you may also decide whether you’ll accept insurance, operate exclusively with self-pay, or use a hybrid model.  

Many professionals choose to get credentialled— a process in which a therapist joins a group of healthcare providers (insurance panel) to work with an insurance company. Insurance provider panels allow therapists to offer insured care to their clients. It does require some work, but many find the benefits to be worth it. Becoming credentialed can help you reach more clients, improve accessibility to care for more people, increase earning potential, and simplify your billing reimbursement process.  

Once you’ve created a solid financial plan, you’ll need to establish your funding options. Funding sources might include a business loan from a financial institution, contributions from family or friends, personal savings, grants, or investors.   

Set up the structure of your daily operations for individual therapy

An operations plan includes the above steps plus the day-to-day operations you’ll need to keep your business up and running. 

Perhaps the most important part of this process is setting up your space with the necessary tools. Whether you set up your practice in a brick-and-mortar office or operate from a home office, creating a safe environment where your clients can feel comfortable is vital. 

It’s also necessary to establish a straightforward client onboarding process. Onboarding typically includes consent and other documentation, the types of services you’ll provide, your treatment expectations, and any other policies you’d like to implement. Have your clients sign these documents before beginning treatment and keep them in a safe location along with their individual file. 

Many professionals use practice management software designed to manage these onboarding processes and individual care plans as well as schedule appointments, provide appointment and payment reminders, execute administrative tasks, and manage other operations tasks. 

Financial software that handles payment collections, invoicing, and record-keeping might also prove helpful.  

Maintain effective marketing practices

Virtually all businesses require a marketing process to attract clients, establish a brand, cultivate a solid reputation, and ultimately make more money. Running an individual practice often includes ongoing marketing management, even after you’ve become established. 

To effectively market your practice, you might attend seminars or other networking opportunities to gain referrals and partnerships. Some professionals leverage their online presence to showcase their expertise and establish a brand. You might post a regular blog, remain active on social media, and send subscription newsletters to do this. This type of marketing attracts clients and can help you to establish yourself as an expert in your field.