Unsurprisingly, becoming a counselor is one of the most popular career paths for candidates graduating with a Master’s in Counseling. However, many choose the equally exhilarating and challenging path of starting their private counseling practice.
Establishing a private practice allows counselors to help people on their terms, research and try new therapeutic techniques, and structure their business in a way that works for them, their families, and their lifestyle.
However, this choice can be challenging as you must know how to run and market yourself and your practice. In addition, as a business owner, you must determine who will do the scheduling and billing, file the paperwork, and balance the books.
Today, we’ll discuss five steps to starting your counseling practice. Of course, you’ll first ensure you have the education and certification requirements checked off, enabling you to practice as a licensed counselor.
Then, you’re ready to hop into step one of starting your own counseling practice.
1. Identify Your “Why”
The first and most important question you should ask yourself is, “Why do I want to start a private counseling practice?” If you do not understand your motivation, it will be challenging to convince clients to come to you for help and keep the business going when challenges occur.
We recommend thinking about your why in three ways:
- How will your counseling practice benefit you?
- How will your counseling practice benefit your family?
- How will your counseling practice help your clients and community?
Once you identify your “why,” create a mission statement by answering the above questions, this will put you in a better position to start a business plan that markets you and your counseling practice to your ideal clients.
2. Create a Counseling Practice Business Plan
A business plan will provide you and your counseling practice with clarity and solid boundaries to make critical decisions.
Ensure the following are included in your business plan:
- Determine your ideal client and what problem you solve for them. Then, focus on a specific specialty to provide the best care.
- Determine the location of your private counseling practice. Will you practice in your client’s home, your home, a traditional office, or via telehealth? What locations are easiest to access?
- Decide your private pay rate and if you’re going to panel with insurance. You’ll want to consider the demographic makeup in your area and your local competition. Another idea is to join insurance provider panels. This can help you find more clients and receive payments directly from insurers. In turn, the therapy you offer is more accessible and affordable to future clients while expanding your network of clients. However, your earning potential will be capped because of the time you are allowed to see clients. On the other hand, utilizing private pay allows you to raise and lower your fees at will—perhaps on a sliding scale—and may offer more control of your business.
- Create an estimated expense list and personal budget. First, determine how much you spend on your business, including rent, bills, insurance, etc. Then decide how much you need to make monthly to earn a decent living and keep practicing. Finally, take the two lists and evaluate how many clients you will see each week to cover your personal and business expenses.
Other items to include as you formulate your business plan, other things to have are:
- Financial Goals — Such as earning enough to hire additional therapists
- Marketing Plans — Such as websites, email nurture campaigns, networking events, etc
- Business Goals — For your first month, year, and five years
- Funding Options — Do you have enough start-up cash, or will you need to take out a loan and create a repayment plan?
3. Understand the Legal Requirements
Every state, municipality, and territory has regulations governing businesses. First, be sure you work with a business lawyer to comply with the laws in your area. Then, once you have a lawyer, they can guide you in incorporating your business and ensuring you meet your area’s requirements.
Ask your lawyer about the following:
- State and local zoning laws can limit where you practice
- Whether or not you need a business license
- How best to incorporate your business as a separate legal entity (LLC, S-Corp, etc.)
- Malpractice and professional liability insurance
- Scope of practice concerns
4. Set Clear Policies and Assemble the Right Forms
Setting clear policies ensures you’ll manage your private counseling practice well. Plus, your clients will know exactly what to expect when they choose you as their therapist.
Make sure your clients understand the following:
- What types of payment you accept
- What you charge per session (do you offer discounts, sliding-scale fees, etc.)
- Your appointment cancellation policy
- The steps you and your practice take to protect client privacy and comply with HIPPA laws
Additionally, you should present this information to clients in clearly worded forms during your first session. Some forms to make include:
- Client intake forms
- Client disclosure forms
- Informed consent documents authorizing treatment
- Referral forms for clients who you refer to other therapists
- Insurance reimbursement forms
5. Prepare for the Challenges of Starting Your Own Counseling Practice
Starting your own counseling practice and working for yourself may seem like a dream come true, but it requires significant work and business acumen to succeed.
It can get lonely, so surround yourself with a community of other therapists in private practice or an entrepreneur group to provide you with the support and accountability you need. Also, consider your work style and how you manage your time, especially regarding the endless paperwork that comes with starting your own counseling practice.
Ultimately, the most important thing to do as a counselor and owner of your own private practice is to do good work for your clients. Plus, making a meaningful difference in someone’s life makes them more likely to recommend you to their friends.
In turn, you can find fulfillment knowing you helped change someone’s life for the better while finding it easier to keep the lights on and handle the business side of your private practice.
Begin the journey to becoming a counselor and start your counseling practice with the University of Bridgeport’s Clinical Mental Health Counseling program!