Thinking of starting a private practice?
One of the biggest (yet rewarding) steps many therapists take is starting a private practice and becoming their own boss. You’ll no longer need to ask for vacation time and you’ll have the freedom to make your own schedule. But one of the biggest challenges is knowing how to start a private practice and knowing which steps to take to set it up effectively and efficiency.
This article will take the guess-work out of the process and teach you how to start a private practice with 13 steps.
Step 1: Become a therapist
The first and most obvious step is to become a therapist. Before you can open a therapy practice, you’ll need to obtain a certain level of education and register with your local regulatory board so that you have the credentials to practice legally and ethically.
When it comes to becoming a therapist, there’s more than one way to go about doing so. To learn more about how to become a therapist, check out How to Become a Therapist.
Step 2: Obtain liability insurance
Next is to obtain liability insurance to protect you and your practice. Depending on your needs and the type of the therapy you’ll be providing, your insurance policy may include but not limited to malpractice insurance, errors and omissions, and professional liability; general liability; commercial liability and property insurance; and cyber insurance.
There has been a major shift in public attitudes towards litigation of professionals both from a client and legal system standpoint (Canadian Association of Social Workers, n.d.) and that’s why it’s even more important to have the appropriate insurance to protect your practice. Although, hopefully you’ll never have to use your insurance but if you do, you’ll feel more confident navigating a claim or complaint because you’ll have the resources to manage the situation without additional financial costs.
Step 3: Register your business entity and obtain a business licence
Now, you’ll need to register your business. To register your business, you’ll need to first have a business name so choose one that is relatable yet distinguishable. Some therapists choose to use their own name while others decide to choose a unique business name.
After you’ve decided on your business name, it’s time to decide which business type you’ll want to open. In Canada, there are three types of business structures: sole proprietorship, partnership and corporation. There are advantages and disadvantages to each structure so chose the best path for your practice vision. To learn more about these three business structures check out the Government of Canada’s website.
Finally, you’ll need to register your business and get a business licence. Each province has their own rules and regulations with respect to business registration so it’s important to obtain up-to-date information specifically from your business registry. Also, many municipalities require operating businesses to obtain a business licence with the town or city, whether they have a physical office space or work from home. So regardless whether you provide in-person or virtual therapy, it’s important to check with your municipality to determine if you’ll need a business licence to practice.
Step 4: Decide on a practice start date
Now the fun part, schedule the exact date you want to open the doors of your private practice. Whether it’s three months, six months or a year from now. Set the exact date. Because once you’ve actually set a date, it’ll feel real and you’re more likely to commit to the process and get everything you need done. Setting a date helps keep you accountable to yourself and pushes the needle in the right direction, so you’re not exactly in the same spot this time next year – dreaming of being in private practice instead of working in it.
Step 5: Set your private practice fee
Next is to set your private practice fee. This step can feel a little uncomfortable as it’s usually much higher than anything you’ve been paid before. As an employee you’re likely used to getting paid $20-$30 an hour but when you set a private practice fee it’s usually much higher than that. The average rate for a session is around $150 per 50-minute session. However, there are therapists who charge less and others who charge more.
When deciding on a practice fee, there are considerations such as your monthly expenses, your desired profit, and whether or not your practice vision includes offering pro bono or sliding scale to clients because these factors will ultimately determine what you’ll need to charge. To learn more about how to set your private practice fee download my free guide 9 Simple Steps for Setting Your Private Practice Fee.
Step 6: Decide on an office space
If you’re going to conduct in-person therapy, you’ll need to decide on an office space for providing comfortable and confidential therapy to your clients. Although this step can be worrisome due to the high monthly price tag for rent, fortunately, since the COVID-19 pandemic, many therapists have seen the value in renting office space on a casual and part-time basis. This helps new practice owners, like yourself, start providing therapy without a full-time commitment.
If you intend to provide online or telehealth therapy only, you’ll still need to find a space that is conducive to providing therapy to your clients. Although the space may be in your own home, you’ll want to ensure that the space is quiet, confidential, and has a welcoming background when providing video therapy.
Step 7: Purchase private practice paperwork
Now it’s time to get your private practice paperwork ready. As a therapist you have special considerations and risks compared to other traditional business models. And having the proper private practice paperwork in place is essential for protecting your private practice and minimizing your legal risk.
But where do you find private practice paperwork?
I’m a fan of legally-drafted private practice paperwork but hiring a lawyer to draft a single client consent form could run up to a couple of thousands of dollars. Fortunately, Corinne Boudreau, a Canadian lawyer and owner of Online Legal Essentials, sells legally-drafted private practice paperwork templates.
By purchasing the Regulated Healthcare Practitioner Legal Template pack, you get everything you need to start a private practice from private practice paperwork templates to website privacy policies to private practice policies and procedure manual and more. And when you use the discount code EVASPARE10 at checkout, you’ll receive an additional 10% off the regular price. Check out the Regulated Healthcare Practitioner Legal Template pack.
Step 8: Decide on a niche
Next, decide on a niche for your private practice. Choosing a niche for your practice can help you create effective marketing materials and stand out among others in the field. Many therapists worry that by niching they are excluding potential clients (and revenue) when in fact it helps promote your practice. Clients who are looking for a therapist are seeking help with a particular issue and when they see marketing materials that align with the reason for why they are seeking therapy they are more likely to reach out. To learn more about the benefits of niching a private practice, check out Episode 22 of the Designer Practice Podcast How Choosing a Niche Can Help You Grow Your Private Practice.
Step 9: Purchase a website domain
Now, it’s time to purchase a website domain.
I get the question all the time, “Kayla, do I really need a website?”
The answer is yes because your website is your virtual office.
Remember, when your professor told you in university to avoid being found on the net? Well, that may be okay advice if you’re working for an existing agency, but in private practice your name is your brand. And if prospective clients cannot find anything about you through a simple Google search you run the risk of being seen as obsolete or worse not legitimate and you won’t get clients that way.
Not only is it important to have a website but also a website with a website privacy policy. Website privacy policies are required by law in many countries and Canada is no exception. In Canada, it’s required to have a website privacy policy added to your website under the Canadian Government’s Personal Information Protection and Electronic Documents Act or otherwise known as PIPEDA. According to the Office of the Privacy Commissioner of Canada, “organizations must generally obtain an individual’s consent when they collect, use or disclose that individual’s personal information.” (Office of the Privacy Commissioner of Canada, May, 2019). This may include the name, age and even the individual’s Internet Protocol (IP) address or cookies, among others. If you’d like to learn more about why you need a website privacy check out Do You Need a Website Privacy Policy in Canada.
Don’t know where to find website privacy policies?
You can purchase them at Online Legal Essentials. As mentioned in step 7, Online Legal Essentials sells cost-friendly and legally-drafted template packages.
If you purchase the Regulated Health Practitioners Legal Template pack, website privacy policies are included in your purchase. However, if you’re looking to purchase website privacy policies individually, you can purchase the Website Legal Essentials template pack. And if you make a purchase don’t forget to use the discount code EVASPARE10 to receive 10% off your purchase.
>>Check out Online Legal Essentials Template Shop by Clicking Here<<
Step 10: Choose a practice management system
When you start documenting client’s personal information, you’ll need a system to store the documentation securely and that follows privacy law guidelines. The old lock and key method still work. But in this day and age with the provision of online and telehealth therapy, it might be worth looking at on online practice management software that’s accessible from anywhere but also privacy compliant.
In my practice, I use Jane App. Jane App is a practice management software company based in Vancouver, British Columbia, Canada. Jane App is both PIPEDA (The Personal Information Protection and Electronic Document Act) compliant for Canadian practice owners and HIPAA (Health Insurance Portability and Accountability Act) compliant for American practice owners.
Check out Jane App and if you sign-up, use the discount code EVASPARE1MO to receive a 1-month grace period on your new Jane account.
But for Canadian listeners, regardless of the online practice management system you choose you’ll want to ensure that it’s PIPEDA compliant because there’s a lot of software out there but it doesn’t mean that they’re compliant with Canadian privacy laws.
Step 11: Purchase and Setup Office Equipment
As you near opening your private practice, it’s time to purchase and setup your office equipment. Whether you provide in-person, online or telehealth therapy, some equipment you might need include an office desk, chair, laptop, printer with scanner, office telephone line, paper, pens and if you’re anything like me lots and lots of post-it notes!
Step 12: Advertise Your Practice
Although you might have been sharing the fact that you’re planning on opening a private practice informally, it’s now time to rev-up your advertising and make it official so that you have clients to work with on opening day.
There are two types of advertising: passive and active marketing. Passive marketing is marketing initiatives that you do once, and although you update it time-to-time, you just leave it. Passive marketing is great because it can bring in clients without taking much effort on your part. Types of passive marketing include therapist directories and your website.
Not only are therapist directories passive but you can also join some great directories for free. One of the most commonly used therapist directory is Psychology Today and if you use a referral link before you set up your new account you can receive your first 6 months free. Although, it will have a monthly fee after that. To receive a referral link email me at info@kayladas.com with the subject line “Psychology Today 6-Month Free” and I’ll send you a link. Two other free therapist directories are Open Path Psychotherapy Collective and Therapy Owl.
On the other hand, active marketing is marketing that you work on consistently to build up the know, like and trust factor to your business. This is important because there’s something known as the Rule of 7 where a client will need to see or hear about you 7 times before committing to work with you (Morris, n.d.). Active marketing helps you to be seen by prospective clients consistently so that when they are ready for therapy, they remember you and reach out. Active marketing initiatives including networking, social media campaigns, and paying for ads.
The Rule of 7 rule is why solely relying on passive marketing doesn’t work for long-term private practice sustainability. It’s unlikely prospective clients will come across your passive marketing initiatives 7 times without intentional active marketing strategies sprinkled in the mix. Active and passive marketing complement each other so when advertising your private practice, you should use both simultaneously.
Step 13: Open Your Practice Doors
Finally, it’s the day you’ve been waiting for, the day you open your practice doors and work with your first clients!
Conclusion
Now, let’s make your dream a reality by implementing everything you’ve learned in this step-by-step guide for how to start a private practice. Take each step at a time and do it at your own pace, but don’t let fear stop you from finally starting your private practice and becoming your own boss.
Looking for more information about how to start a private practice?
Sign up for Online Legal Essentials free on-demand 60-minute masterclass called Roadmap to Start Your Online Healthcare Practice which gives you a roadmap of critical steps to take to open your private practice. The masterclass shares important financial, legal and privacy considerations. Sign up for the Roadmap to Start Your Online Healthcare Practice on-demand masterclass
Disclaimer 1
Any links, referrals or promotional codes listed in this article may be affiliate links where Evaspare Inc. may receive monetary compensation, at no extra cost you, when you click or use links or promotional codes.
Disclaimer 2
Please be advised that this article is for educational and informational purposes only and is not intended to be professional advice.
References
Canadian Association of Social Workers. (n.d.) Liability insurance. Retrieved from https://www.casw-acts.ca/en/about-casw/becoming-member/liability-insurance
Government of Canada. (2023, November 30). Setting up your business. Retrieved from https://www.canada.ca/en/revenue-agency/services/tax/businesses/small-businesses-self-employed-income/setting-your-business.html
Office of the Privacy Commissioner of Canada. (May, 2019). PIPEDA in Brief. Retrieved from https://www.priv.gc.ca/en/privacy-topics/privacy-laws-in-canada/the-personal-information-protection-and-electronic-documents-act-pipeda/pipeda_brief/
Morris, R. (n.d.). Rule of 7 Marketing. Retrieved from https://www.munro.agency/rule-of-7-marketing/#:~:text=The%20’Rule%20of%207’%20is,action%20and%20make%20a%20purchase
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