How to create a business plan for your private practice
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Wondering how to create a business plan for your private practice? This article has all the info you need and includes a free downloadable private practice business plan template.
Launching a private practice is one of the most exciting and challenging endeavors a therapist can take on in their career.
While we are taught counseling skills in our graduate programs, we’re not typically taught how to create a business plan for your private practice. There isn’t time to cover any of the business acumen needed to build a thriving and sustainable practice after graduation.
A well-structured mental health private practice business plan serves as a roadmap to guide your practice’s growth, ensure financial stability, and help you attract your ideal clients.
Whether you're just starting or looking to refine your existing practice, this guide walks you through how to create a business plan for your private practice.
This article also includes a free downloadable private practice business plan template to help you cover all the components of your plan.
Why you need a business plan for your therapy practice
A private practice business plan helps therapists define their goals, identify challenges, and create strategies for long-term success.
It provides clarity on goals, finances, marketing, and client engagement, which add up to ensuring you run a sustainable practice.
Additionally, if you ever seek funding—perhaps in order to grow into a group practice—investors or lenders will likely require a business plan.
Key benefits of a therapist business plan include:
- Establishing clear goals and a strategic vision
- Helping define your ideal client and niche
- Creating financial projections for sustainable growth
- Guiding marketing efforts to attract and retain clients
- Supporting operational efficiency and scalability
Essential components of a therapy business plan
Now that you know the benefits of a business plan, let’s go over each component in the steps of how to create a business plan for your private practice.
Below are the fundamental sections to include in your private practice business plan.
For easy implementation, download our private practice business plan template at the top of this article, which provides a structured framework to fill in your specific details.
1. Executive summary
The executive summary is a high-level overview of your practice, summarizing the key elements of your business plan.
Here’s what to include in this section of your business plan:
- Name of your practice
- Summary of services offered
- Brief description of your target clientele
- Business goals for the next one to five years
2. Mission statement and core values
Your mission statement defines the purpose of your practice, while core values establish the guiding principles that shape your work.
This is a step that a lot of clinicians skip, however, it provides necessary guidance for your marketing copy and website copy.
Tips to consider when writing this section include:
- Keep it concise and client-centered
- Highlight how you aim to impact your clients’ mental health journey
- Include values that guide your therapy approach (e.g., holistic care, evidence-based practices, inclusivity, results-driven etc.)
- If you get stuck, ask yourself “Why did I become a therapist? What do I want every person to experience in my therapy office?”
3. Legal and administrative considerations
Ensure your practice meets all legal requirements and operates efficiently. Having all of this information gathered in one place is critical to staying organized.
The checklist of items you need to consider includes:
- Business entity selection (LLC, sole proprietorship, etc.)
- Licensing and credentialing
- Professional liability insurance
- HIPAA compliance and confidentiality policies
- Electronic health record (EHR) software for secure documentation
4. Identifying your ideal client and niche
Defining your niche helps differentiate your practice and attract the right clients.
A common misconception is that niching will cause you to lose out on a higher level of clients.
However, I always encourage clients to remember that if you’re talking to everyone, you’re talking to no one.
I also encourage therapists to remember that we are always best positioned to serve a client who resembles a past version of ourselves in some way.
When thinking about your ideal client, consider the following questions:
- What are your ideal client’s demographics? (e.g., age, profession, life stage, marital status, etc.)
- What are your ideal client’s psychographics? (lifestyle, pain points, values, buying behaviors, etc.)
- What specific issues do you help clients address? (e.g., trauma, anxiety, relationships)
- How do these issues present in your client’s life? (e.g., trauma may present as an unhealthy relationship)
- What therapeutic approaches do you specialize in? (e.g., EMDR therapy, CBT, somatic therapy)
This section will serve to anchor your marketing and website copy, so the more specific you are, the better.
Keep in mind, you can always pivot or change your mind in the future. You aren’t locked into anything.
5. Financial planning and budgeting
Establishing financial goals and tracking expenses is essential for sustainability. Most clinicians that I talk with will list finances as being one of their top stressors.
The earlier we plan and set up a strategic vision for your financial planning and budgeting, the less of a headache it becomes down the road.
In this section of the private practice business plan template, you’ll want to include:
- Start-up costs (office space, website, legal fees, EHR software)
- Monthly expenses (rent, insurance, software, marketing, taxes)
- Revenue projections (expected income based on client load and pricing)
- Profit goals and reinvestment plans
If this becomes overwhelming, I recommend breaking it up into two sections.
You can have a financial planning section that covers revenue projections and profit goals.
Then, your second section can be budgeting.
Of course, these numbers will change as you gain more data. This is simply a starting point.
6. Services and pricing structure
The next section of the counseling private practice business plan involves outlining the therapy services you’ll offer and setting clear pricing to ensure sustainability.
Make sure to include descriptions on the following:
- List of services (e.g., individual therapy, couples counseling, group therapy, workshops)
- Pricing structure (private pay rates, insurance options, sliding scale availability and rates)
- Number of sessions available at each pay rate (e.g., 10 private pay sessions, 5 sliding scale sessions weekly)
- Session formats (in-person, telehealth, hybrid)
Having laid out exactly what your rate is and how many sessions for each rate you have available will support you in maintaining boundaries down the road to keep you in alignment with your financial goals.
7. Marketing and client acquisition strategy
A strong marketing plan ensures your practice reaches the right clients.
I recommend selecting three overall strategies to double-down on: one in-person strategy (networking, community engagement, etc.), one digital marketing strategy (SEO, social media, email marketing), and then one more based on your strengths.
For example, if you are an extrovert and enjoy meeting people, you should have networking and in-person relationship building on your list.
Here are some marketing channels to consider for your private practice:
- Website and SEO: Optimize your website with clear service descriptions, blog content, and SEO-friendly keywords.
- Social media and content marketing: Engage potential clients with educational posts, mental health tips, and insights into your approach.
- Networking and referrals: Connect with other therapists, physicians, and community organizations for referrals.
- Online directories: List your practice on platforms like the SimplePractice Monarch Directory, Psychology Today, TherapyDen, and GoodTherapy.
- Email marketing: Send newsletters with updates, insights, and mental health resources to engage current and potential clients.
Everyone will have an opinion about what type of marketing you should engage in based on their experiences.
When figuring out how to create a business plan for your private practice, remember that having a pre-set plan will help you put blinders on and focus on your personal goals, rather than getting lost in mindless scrolling and reading about what everyone else says you should be doing.
8. Growth and expansion plan
The final area to consider in the private practice business plan template is your growth and expansion plan.
Outline how you plan to grow your practice over time.
This vision will keep you focused as you continue on the ups and downs of private practice ownership.
Consider the following areas for potential growth:
- Scaling options (hiring additional clinicians, offering workshops, launching online courses)
- Passive income streams (e-books, mental health resources, speaking engagements)
- Expanding services (group therapy, retreats, specialty programs)
Setting yourself up for success and next steps
Learning how to create a business plan for your private practice is a crucial step in building a sustainable and thriving career.
By taking the time to map out your goals, finances, and marketing strategies, you set yourself up for long-term success.
Whether you’re just starting out or refining your existing practice, a solid plan will guide your decisions and help you navigate the challenges of private practice.
Then, learn how to start a private practice using this free checklist that goes over each of the steps to implement your business plan.
Invest in your future by taking the time to learn how to create a business plan for your private practice—your future clients (and your peace of mind) will thank you.
How SimplePractice streamlines running your practice
SimplePractice is HIPAA-compliant practice management software with everything you need to run your practice built into the platform—from booking and scheduling to insurance and client billing.
If you’ve been considering switching to an EHR system, SimplePractice empowers you to streamline appointment bookings, reminders, and rescheduling and simplify the billing and coding process—so you get more time for the things that matter most to you.
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