Opening a private practice as a psychologist
January 5, 2021
Going into private practice is like starting a business in any field, it is overwhelming and rewarding. With any business you will need to market and network, but in this case, you will need to market yourself which can pose a challenge.
The business of psychology
The business and marketing aspects of going into private practice remain an enormous hurdle for many graduates finishing their education in the field of psychology. Board certified behavior analysts (BCBA’s), licensed clinical social workers, licensed professional counselors, and psychologists are just some of the subset of careers in the field of psychology that have trouble crossing the bridge to private practice. As psychology graduates and prospective private practitioners, the problem is largely due to the fact that many, if not most, advanced degree institutions do not offer marketing and business courses in their psychology programs.
You will have to decide how much you will charge for each session, your appointment cancellation policy, and what circumstances you would refer your client to another provider.
Business studies 101
To go into private practice is to go into business and, as with every business, you need to have a solid plan and model. In a business model you should outline the spending and income needed to keep the business in the black. A business owner also must account for profit. This profit will become the business owner’s personal income and savings for the business, in addition to funding the cost of hiring additional employees.
In private practice an owner needs to address a long-term plan for the practice. Owners must factor in the costs of adding extra therapists, an administrator, accounting expenses, billing etc. Setting goals that begin with the first year and extend all the way until the 20- or 30-year mark are imperative to track progress and to make sure the model is realistic. Assessing your loan and savings options to ascertain that you can cover marketing and start-up costs is important too. Taking out a loan is two-fold. First, you must have a positive credit history. Second, this good credit history ensures that you are eligible for loans at a good interest rate.
Establishing your business policies from the beginning will be crucial. When it comes to payment, you will need to research and decide on which insurances you will accept and which payment methods. You will have to decide how much you will charge for each session, your appointment cancellation policy, and what circumstances you would refer your client to another provider.
Establishing your workspace
Addressing where clients will be served is vital. A therapist needs to make sure that their workspace is confidential and secure. Again, there are costs that need to be factored in that include decorating, furniture, secure storage, security, technology, internet, answering service and so forth. Don’t forget that billing, insurance, and health records also must be secure as to not violate laws or the Health Insurance Portability and Accountability Act (HIPAA).
Hiring additional employee(s) can be a tremendous help to a therapist in practice. Office administrators can perform duties like answering phones, billing, and receiving insurance information, filing, and record keeping. Having someone to do all these tasks can save the therapist valuable time and money. With hiring additional help, you also face the question of payroll taxes, health insurance, and salaries.
The need to network
Networking with other therapists is a fantastic way to gain information on what works and what does not. Networking is a means of free marketing with the potential possibility of other therapists referring clients to you. It can offer an informal mentorship service which is especially useful when you are new in this field.
Networking can be reciprocal in referring clients and offer the chance to build longstanding rapport with professionals in the field. Joining provider networks for various insurance agencies may come with the sought-after benefit of reaching a larger clientele. Along with networking, marketing by using the internet, ads, business cards and social media can be a great way to reach the community and promote your services. In addition, attending conferences and seminars to reach therapists and get your business name out there is a recommended step.
Psychologists, in many specializations, choose to join community hospitals, mental health facilities, foster-care services, and case management teams in order to gain experience and build their skills.
Gaining insight from experience in the field
Many therapists gain their knowledge of running a practice by joining an established practice at the start of their careers. Psychologists, in many specializations, choose to join community hospitals, mental health facilities, foster-care services, and case management teams in order to gain experience and build their skills. By taking this initial step of joining a practice, you can learn what you need to know to set up your own practice.
This approach can remove the guesswork and offer the opportunity to observe, ask questions and learn skills that are relevant to the business and marketing side of therapy. The downside of joining an established practice is that it can inhibit developing your own brand. You may also create a false ceiling for yourself by believing that your income possibilities are limited. For example, many “entry level” type of positions in facilities may only pay low salaries, as they accept clients with Medicaid or Medicare insurance as required by the specific state guidelines.
Takeaway tips on setting up a private practice
Holding high ethical standards and adhering to the laws of your state for licensing, business practices and taxes, is one of the cornerstones to a fruitful career. Similarly, making sure you and your team all follow continuing education, ethics and licensure regulations is imperative.
Time management and outlining the duties of your private practice will be the key to success and longevity of your career and practice. Setting goals, maintaining ethics, networking, evaluating policies and having a long-term business plan are all key to allowing your career to flourish. While many of our programs lack marketing, economics and business courses may be available to you as an elective or additional course. Discussing these options with your college counselor would be of value. The field of psychology is growing, and we can anticipate private practices will match this growth in the future. With a proper plan in place, your possibilities are endless.