Start a Private Practice Checklist
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Looking for a start a private practice checklist? You can use the start a private practice checklist template in this article to ensure you don’t miss a step in getting your business started.
Starting a mental health private practice is an exciting venture—it can represent more impact to your community, more control over your schedule, and potentially, more income.
But for many, this dream can turn to dread as questions mount about the practical realities of setting up a private practice.
In order to manage stress and keep you on track, SimplePractice has created a free start a private practice checklist. This tool provides you with small actionable steps to reach your goal of starting a private practice.
If you’re excited about the possibilities of running your own private practice, but have questions and are looking for some concrete guidance, then this article is for you.
This article goes through each step required to reach your goals. You can then use the free, downloadable start a private practice checklist template as is, or customize it to build the practice of your dreams.
As you move through the process, you track your progress on your start a private practice checklist, which expands on each step.
Step 1: Research and planning
Gather information and consult with others
As you are getting started, it can be helpful to gather information upfront to make wise decisions. This can include reaching out to peers for advice, finding an online therapist group, or speaking with past supervisors.
This article and start a private practice checklist should not be considered a substitute for professional legal or financial advice. Consulting with a lawyer and/or a certified public accountant (CPA) can be especially beneficial to help guide your decisions.
There are also many blogs, forums, podcasts, and books from people who offer advice on how to start a private practice.
Check state laws to ensure you can start a private practice
One of the first steps in how to start a therapy practice is to check state laws to ensure that you are allowed to open a private practice, given the current stage of your career and licensure status.
This situation mainly applies to those who are trainees or associates, since some states do not allow unlicensed or pre-licensed clinicians to independently start a private practice.
Ensure your NPI and state licensure are in good standing
In order to set yourself up to run an ethical private practice and protect yourself from legal risks, you should double check that your personal National Provider Identifier (NPI) and state licensure are active and in good standing prior to starting your practice.
Review your finances and estimate your start-up costs
Before you get your private practice off the ground, you’ll want to create an estimate of the amount of money you will need to spend before you start generating income.
Costs may include legal or CPA fees, fees for setting up a business entity, initial electronic health record (EHR) system fees, website fees, marketing fees, and more.
If your financial self-assessment indicates that you are not quite ready to begin the setup process, then this is a good time to make a plan to start saving.
In some cases, you might need to save for a couple of months to a year until you have the start-up costs covered, and then launch your practice—rather than jumping in right away and running out of money before you start making a profit.
Setting up automated monthly or weekly savings withdrawals is the most effective way to hit savings targets.
It is highly important to take an honest look at your current financial situation and your monthly budget. This will give you a sense of where you are now and how much money you will need to make from your private practice.
Then, this will inform other decisions, like whether you will start out full-time or part-time, how many clients you’ll need to see per week, and what your session rates should be.
Step 2: Business essentials
Select a business entity
Your practice will need to operate under a single business structure, and, as part of your start a private practice checklist template, you’ll need to decide what that structure will be. This could be a sole proprietorship, an LLC, a corporation, or a professional corporation.
There are pros and cons to each type of entity, so it is important to do your research. You may want to consider consulting with a lawyer and accountant, and checking with your state laws, as some states have specific requirements for private practice entities.
Name your practice
One of the most fun and creative steps in determining how to start your own private practice is selecting a business name. The name you choose for your practice represents you, your work, and the way potential clients come to know you.
Once you have narrowed down your top choices for a business name, search your state’s business name database to ensure that name is not taken. Check with your state’s requirements as well, since you may be required to include certain words in your business name, such as “corporation,” “LLC,” etc.
After you decide on a name that feels unique and on-brand for your practice, you can register the business entity and name with the appropriate authority in your geographic area. You can typically complete this yourself online or with the help of a lawyer, who can file on your behalf.
Get an employer identification number (EIN)
Following the registration of your business entity, it is important to get an employment identification number (EIN). This is a unique identifier for your business that you can apply for through the Internal Revenue Service (IRS) website.
The EIN is used for tax purposes with your entity. It can also be used as an identifier for other business purposes. Having an EIN can protect you from using your personal social security number as an identifier on business documents (especially in the case of sole proprietorships).
Determine your practice location
Since the pandemic—and the resulting increase in telehealth use—many clinicians have gone virtual. When deciding between operating a telehealth practice, providing in-person therapy, or running a hybrid practice, you’ll want to consider what best suits your goals and your client’s preferences.
If you have decided to see clients in-person, you’ll need to search for office space. Look through online listings, network with other therapists, or speak with a local realtor to find the best place for your practice.
Once you find potential spaces for rent, you will want to speak with the landlord and work out the terms of the lease. Prepare for meeting or communicating with landlords by researching what reasonable terms of an office lease are in your area.
If you choose to work from home, you’ll need to establish a quiet, secure space in your home that can facilitate quality sessions and honor client privacy—whether or not you intend on having sessions in-person.
Even if you’re meeting virtually via telehealth video sessions, it’s important that your home office and video background is free of distractions and protects the client’s privacy—make sure sessions can’t be overheard, and no one can barge in during a therapy session.
The fun, and somewhat expensive part of this step, is to be able to decorate and design your office that reflects your personal and professional style, and is conducive to a healthy therapeutic environment.
Obtain relevant business licenses
It is important to look up any local business and zoning laws for your area, especially if you are seeing clients in-person, at an office. In some cases, it is necessary to obtain a business license to practice in that area.
Ensure you have the proper insurance
The main protection that you need to have in place is your professional liability insurance, however, you may also need general liability insurance.
Insurance policies and prices can vary depending on the type of business entity you have, how much coverage you need, the size of your practice, your professional history, and where you provide care. Since there are so many factors to consider, it is important to speak with insurance companies or insurance brokers to figure out what policy you need.
You will want to obtain professional liability insurance to protect yourself and your practice from any claims of negligence, misconduct, errors and omissions, or personal injury as a result of rendered professional services.
If you have an office space where you see clients, having general liability insurance—in addition to professional liability insurance—can be helpful for certain situations, such as if a client were to fall and be injured in your office.
Depending on your practice and your level of risk tolerance, you may also consider other types of insurance, such as cyber/data protection and workers’ compensation.
Consider setting up a PO box
You may want to consider getting a PO box or mailing address other than your home. This can separate your work and home, especially if you are a telehealth-only provider or work out of your home. It will also protect your home address from being published to clients on the internet.
However, some services will only accept an actual physical address, in which case, having an in-person office address can be beneficial.
Step 3: Payment, insurance, and HIPAA-compliance
Determine your payment sources
As part of the start a private practice checklist, you’ll need to decide whether you will only accept private pay clients, or whether you’ll get credentialed with insurance panels.
Weighing the risks and benefits of these different avenues has important implications for how you will manage the marketing and financial aspects of your business.
If you are considering accepting insurance, make sure that you have spoken with other paneled therapists and insurance companies to understand their rates and policies.
Apply for credentialing with insurance companies
If you decide to accept insurance, start researching and applying to become credentialed, aka “paneled,” with the insurance companies that you want to work with. It can sometimes take months to get credentialed and start accepting clients, so start this process as soon as possible.
Set your private pay rate
Clients should be clear on what your private pay rates are and, if you accept a sliding scale fee, how far you are willing to lower your price. You will need to include this as part of your online profiles, website, and other marketing initiatives.
If you are uncertain on what to charge, you can ask other therapists directly and compare rates with other therapists in your area.
Set up a HIPAA-compliant email and phone line
You will need a way to communicate securely with clients, coworkers, and vendors—through HIPAA-compliant email, phone lines, messaging, and telehealth hosting platforms. Researching and selecting the right company to manage your secure communication is important.
SimplePractice secure messaging can be used directly with clients for immediate HIPAA-compliant communication. Secure email options include Virtru, GSuite, and Hushmail. Secure phone line options include Phone.com, iPlum, and RingRx.
Set up a business bank account
With your business entity and EIN in place, you can now set up a business bank account. This is important to create a separation between your business and personal finances.
Many people will choose to create a checking account that will receive and make payments, while also having a savings account to set aside a portion of all income for taxes.
Set up an accounting system
After setting up a bank account, you’ll need an accounting system to keep track of your finances.
You may want to hire a bookkeeper or CPA to help set this up or manage it long term.
However, even if finances aren’t your strength and you want to outsource these tasks, it is helpful to know as much about accounting and finances as you possibly can to avoid costly errors. There are many online systems that you can set up to streamline your bookkeeping and accounting, with Quickbooks being one of the most common.
Step 4: Marketing and practice management tools
Create an initial marketing plan
The next step in how to start a private therapy practice? Come up with a marketing plan.
Two of the main questions related to marketing that you’ll want to ask yourself are:
1. How do I want to present myself and my specialties?
2. How do I best make contact with potential clients that I am seeking?
This can take many different forms. For most, this involves establishing an online presence by creating a website, using search engine optimization (SEO) so clients can find you on internet searches, and creating therapist directory profiles.
However, it can involve other channels, such as social media, paid ads, and networking with other health professionals. You will need to choose which channels you want to market your services through and decide how to authentically describe and present yourself and your practice.
Set up an electronic health record (EHR)
Some of the most tedious administrative tasks for therapists include daily management of scheduling, appointments, billing, and progress notes.
The electronic health record system that you choose is a big determinant in how efficiently and effectively you’re able to complete administrative tasks.
It’s important to invest time into vetting and finding the best EHR for what you need and can afford.
For example, the SimplePractice EHR has capabilities for online appointment scheduling and calendar sync, streamlined note-taking and documentation, and automated billing options.
Start setting up a website
One of the first practical steps of marketing your private practice is to begin building a website. Your website will be the homebase for your marketing strategy and where you can direct potential clients. Most marketing channels will point back to your website, so it is key to build your website first.
There are many website builders such as Wix, Squarespace, or GoDaddy that can help you set up a domain name and build a site yourself from one of their templates. Or, you can use a website builder integrated into your EHR—like the SimplePractice website builder, which is very easy to use and set up.
If you don’t want to build a website yourself, you can always look for a freelance designer to help you.
Set up online directory profiles
Online directories can be a magnet for potential clients looking for therapy. Having a profile on these directories can greatly increase your access to clients who are looking for your services.
Some of these directories are paid, while others are free.
Examples of therapist directories include Psychology Today, Therapy Den, Inclusive Therapists, and Good Therapy. Certain EHR systems also include a profile listing in a directory, such as the Monarch directory by SimplePractice.
Establish any other avenues of marketing
This is the time to take action on any other areas of marketing you decided to pursue when coming up with your marketing plan.
For example, maybe you join online therapist referral groups, print and hand out your business cards, network on LinkedIn with clinicians in your area, or set up paid advertising.
Whatever your strategy is to connect with potential clients, start implementing those methods to move your marketing into full effect.
Step 5: Policies and paperwork
Research and get familiar with local and state laws
In addition to becoming familiar with various business laws, it is essential to get familiar with the legal and ethical standards set by your local governing bodies and relevant licensing boards—so you can stay apprised of what is required of you, not only as a clinician, but also as a business owner.
Knowing the laws and ethical standards will help to shape your practice policies and required paperwork.
Determine your practice policies and create your paperwork
As you develop your knowledge of pertinent laws and ethics, create your practice’s policies and procedures around these guidelines and requirements. For example, ensure you have a process to handle reporting mandates.
Other policies that don’t have legal bearing or clear guidelines still need to be established. One such policy is a cancellation and no-show policy—set violation fees, clearly communicate the terms of the policy, and obtain signed consent to record clients’ compliance.
You’ll also want to have processes in place for preferred modes of communication with clients, emergency communication procedures, and your hours of availability. These measures will help you set expectations with your clients, establish professional boundaries, and facilitate work-life balance.
As you gain clarity on how you want to meet ethical standards in the structure and organization of your practice, create your intake paperwork and other forms that reflect these policies. Some of the main documents you will need to create include informed consent, practice policies, disclosures, privacy policies, telehealth consent, and release of information forms, among others.
Some EHR systems, such as SimplePractice, provide templates that eliminate some of the stress of creating legal documents. There are also lawyers who sell state-specific paperwork packages. If you choose to create your own paperwork or use templates from an EHR, it can always be helpful to have a state-specific lawyer review the documentation you create.
Connect your EHR and payment methods to your bank account
The next step in the start a private practice checklist is to make sure your EHR and any other payment receipt methods are linked to your business bank account. This will usually be set up in the Settings or Admin section of your payment method. It is important to make sure you are actually getting paid for your work.
Develop your initial contact and intake process
Having a clear and repeatable process for screening potential clients and onboarding new clients will reduce a lot of stress for your practice.
Many therapists offer a free 15-minute consultation call as their first step in this process. No matter how you decide to assess if potential clients are a fit, it is important that you have a standardized system to make bringing in new clients effective and efficient.
Step 6: Start seeing clients
After following all of these steps in the start a private practice checklist, you will be ready to launch your private practice.
Need a shorter, actionable checklist to print out and make the process even easier? Download the free start a private practice checklist template to keep track of all of the steps you make on your journey to becoming a private practitioner.
Soon you can begin the important work of supporting your new clients.
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.
Try SimplePractice free for 30 days. No credit card required.