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STARTING A PRACTICE Q&A

Starting a practice can be a daunting task! This page is for members who are seeking answers to some common questions. If you're not finding what you're looking for, feel free to submit a question to us!

How much should I budget for starting a practice?

When budgeting for your own practice, there are a few important items to consider:
  1. Office space: Although you need to think about rent, you also need to remember utilities, furniture, and design/upkeep of the space.
  2. Technology needs: This may include your Internet service, phone service, computer(s), printer/copier/fax, and any other technology to run your practice. Other office management tools may be budgeted for in this category, such as billing software and electronic health record servies. These services may have a monthly cost.
  3. Marketing/Advertising costs: Some common costs are business cards, graphic design, and the cost of a website or email client. Remember that you need to consider both the design of your materials and the costs to print or host them online.
  4. Professional management: Budgeting for your yearly licensing fee as well as required continuing education trainings are a must.
Overall, there are many considerations when budgeting for a practice. As you begin this process, don’t forget to enjoy this journey and take a moment to reflect on how far you have come!

 

How do I rent space? Do I lease or rent from someone by the hour?

There are many ways to obtain office space:
  1. Consider renting your own space.
  2. ​Sublet a space or office
Renting your own space: This would mean you are the lease holder and are fully responsible for the office. The positive to this type of space is of course freedom! You have full control of the design of the office and how your office functions. Secondly, you have flexibility! You have access to your space at any time so you can make your own schedule and be in and out of the office when you want. The place is yours! The drawback is there is a larger investment. You are responsible for the rent each month, no matter how many clients you see. You are responsible for the furniture/design and setup of the office space. Oftentimes, you may have space that requires furnishing a waiting room. This can be more costly. Another drawback is it can be more isolating. Having your own space allows freedom, but you may not have other professionals there to collaborate with.

Subletting: There are a few ways to sublet. You can rent by the day, blocks of time or by the hour. Again, there are many positives to this agreement. First, you can tailor to your needs. If you want to only see clients two days a week, then great! You can rent an office space for just those days. Want to only work evenings? Find a place that allows you to sublet for this block of time. Oftentimes, subletting means that the space is fully furnished. This would reduce startup costs. Another positive is that it could be less isolating. Of course, there are drawbacks. First, this could limit growth. Let’s say you rent for Tuesdays and Thursdays and as you grow your practice. Adding another day may not be an option. Another drawback is that you are sharing workspace. Therefore, it may not be set up the way you would like or have limited storage space for your records and materials. This can pose a problem with transferring items you need. It can also be more costly if you break it down. What you pay per day/hour may be more than if you rented your own space. However, if you rent by the hour, you typically are only paying for the time the office is used.

 

What amount do I need for liability insurance? What does it cover?

It is highly recommended for any mental health professional to carry professional liability insurance. Why? It’s simple. This is to protect your license from any claims, lawsuits or grievances with the regulatory board. Professional liability is portable, meaning it covers your license wherever you are practicing, so it is not specific to your place of employment. Also, most insurance companies offer legal resources and support so you can seek out support when needed. The cost for coverage varies depending on your policy choice, licensure status, and number of clients seen per month. This could range anywhere from $200-$1,200 a year. You want to ensure you choose the best coverage for your practice and not bargain shop. This is one area that you want to spend in order to safeguard you and your license. It is most helpful to contact insurance companies directly to review options that best fit your practice needs.

If you choose to open your open practice and you are the leaseholder, you may be required by your landlord to obtain General Liability Insurance. If it is not required, it is highly recommended to consider this as an option. General Liability Insurance is also known as “slip and fall” or “premises liability.” This protects you from lawsuits and claims related to injuries that happen in your practice. Although we hope this never happens, it is possible that someone may be injured while in your office. Although TAMFT does not endorse any particular company, CPH and Associates and HPSO are two commonly used companies among mental health professionals. 

 

What are the most challenging aspects of setting up your own practice?

  1. Finding and keeping your own office
  2. Developing a referral base
  3. Creating your own professional supports
  4. Doing your own billing
  5. Finding a location
  6. Getting clients into your office
  7. Surviving the initial shock of not having a regular paycheck

 Private practice means finding and keeping up your own office, developing a referral base, creating your own professional supports, and doing all of your own billing. Private practice also means the freedom to set your own hours, define the work you want to do, create your own working environment, and choose your clients and modes of intervention. Any money you make will benefit you directly because you are no longer paying for agency overhead or union activity.

Many clinicians who opt to go into private practice do so while still holding down a regular job or a part time job. This allows you to step into private practice gradually.

Lastly, the business side is important to learn. This is often hard for private practitioners who want to be helpful and are not focusing on the fact that their practice generates income. How many clients you see per week=income. Make sure that you conceptualize a business where you generate the income you need. This may mean you do groups, which are great for generating income. If you are fully licensed, another suggestion would be considering joining insurance panels. A good way to join an insurance panel is to ask a clinician already in practice to recommend you to an insurance company. This gives you a little more clout.

 

Is it important to have a specialization or niche?

It is always good to conduct a careful needs assessment of your communities and think about the clients you enjoy seeing most. Getting started, most practitioners see everyone, no matter what the issue. Once established, you can begin to focus on a specific population and refer others to your colleagues. As you do specialize, make sure that your advertisement and marketing explains what you do differently that clients would benefit from. Some considerations include: pain management, sports psychology, dual diagnosis, children who are developmentally delayed, school problems, family businesses, adolescent anxiety and depression, or elder care, just to start. Choose a specialty eventually that you enjoy and your work will be very satisfactory.

 

How do I set my fees? Would I start off charging less due to experience level and increase over time?

  1. Research mental health professionals in your area to see what the "going rate" is
  2. Consider a sliding scale
  3. Consider degree type and level of expertise
  4. Be clear in communicating your fees to potential clients
This is always a tricky question because there is no standard fee. A good rule of thumb is to research mental health professionals in your area to see what the ‘going rate’ is. Taking in consideration degree and credential level is advised. Sometimes it is helpful to think, “if I were a client, what would I be willing to pay?” If your fee is higher than what you would truthfully be willing to pay, then it may be too high. As you become fully licensed and/or your degree level changes, you may increase your fee. If you do, make sure you have this updated fee in your informed consent and that new clients clearly understand your fee structure. However, when changing your fees, it brings up the question of whether you pass this increase on to current clients or only to new clients.

 

How important is location when looking for an office space?

Location can make a big difference as you begin looking for a place to practice. Here are some thoughts to consider:
  1. Demographic of neighborhood
  2. Ability of/willingness of potential clients in using insurance versus cash
  3. Willingness to sign up for insurance panels and Medicare
  4. Saturation of therapists and niches/specialities in your desired area
  5. Possibility to develop/fill a niche/speciality for your desired area
  6. Possibility to rent an office for hour or week from an established therapist or clinic
  7. Commute

For example, if you rent a space in a low-income area, your fees may need to reflect that location. If you move into a more affluent area, your fees can be higher. If possible, it is helpful to call therapists that practice in your desired area and ask if they take insurance or Medicare or cash. Ask what their fees are and what services they offer. From conversations with several offices, determine if you are willing to sign up for insurance panels and Medicare.

Another consideration is to see how many therapists are in a certain location and what their specialties are. Just because many therapists seem to populate a certain area might not mean that one more therapist would thrive there. Many new therapists look on psychologytoday.com to see who is practicing in a certain zip code. By looking at the profiles of those in that zip code and their specialties, you can determine if you offer a certain service or specialty, such as working with children or adolescents and their families.

Lastly, remember that private practice can be humbling at first, until the word gets out about your outstanding therapeutic skills! As you adapt to marketing yourself and building a practice, having a lesser amount to pay each month, based on your need, will be a huge relief. Plus, therapists with big practices that can offer you an office by the hour often will refer their overflow clients to you.

Finally, choose a place that you can commute to without too much hassle, such as a long commutes with traffic, which might occasionally make you late to the office. You need to arrive refreshed and ready to take on any client.