How To Start A Psychotherapy Private Practice

by | May 25, 2022

Are you looking to start a private psychotherapy practice? Perhaps you have worked in the NHS but now need more flexibility in your working hours. Perhaps you wish to be in a position where you can work from home or even online. There are many benefits to setting up your own private psychotherapy practice, however, there are also many things to consider and a few steps to take too.

In this guide, we will assist you with our checklist of how to start a psychotherapy private practice and we’ll also be asking you to consider if starting your own therapy practice is a good idea.

Are You Sure You Want To Start A Psychotherapy Private Practice?

Whilst the concept of your own private practice may seem ideal, the truth is that it’s a lot of hard work. Flexibility and autonomy may be reasons for opening your practice but many of those who go down this path find that their work-life doesn’t look quite how they expected.

It’s important to recognise that opening your own practice means becoming a business owner. Being a business owner is very different from being a therapist.

So, here we’re going to highlight some of the challenges of running a private psychotherapy practice and, if we haven’t put you off, we’ll move on to guide you through how to set up your practice.

Flexibility

Many professionals who choose to transition to self-employment do so to make their schedules more flexible. Being able to see clients at a time that suits you and your clients too, is a great benefit for those with their own practices. However, it’s important to consider that there will be a lot of work outside of offering therapy which will likely see your workload increase for some time whilst you become established. You’ll need to dedicate considerable time to setting up your business, marketing your business and finding clients.

Most likely, for your first year in business at least, you may find yourself working more than you were before. You’ll still get to choose when of course, so those with other responsibilities such as childcare and caring for other relatives may still find that flexibility priceless. Still, you may need to work on weekends or in the evenings if you need to build up a profitable business quickly.

Support

Autonomy is a massive benefit to being an independent practitioner. However, so is support and this can be hard to come by if you’re going it alone. Especially, you’ll want to research your legal obligations to clients and protect yourself from any conflict that could arise in the course of your work. Within employment, you can expect legal and moral support should any conflict arise but as an independent practitioner, you will likely be dealing with this by yourself.

We suggest finding yourself a mentor, if possible. Perhaps somebody who has set up their own practice before and can offer you a guiding hand, some advice and be there to support you with any difficulties you run into. In addition, you may want to consider having a lawyer draft or at least check through your paperwork including your client contracts.

Costs

Setting up a business costs money. How much depends on how quickly you want to grow and what size you would like to get to. In reality, if you plan well, keep track of finances and don’t run before you can walk, setting up your own practice shouldn’t cost the earth. However, there are some things you will need to have such as insurance and data protection. If you wish to set up a limited company then you’ll also incur costs for doing so, though these are minimal. Marketing your business can be costly depending on how you plan to reach out to potential clients, although all therapy practitioners should strongly consider having a website if only to prove your credentials. Those planning to open up a practice outside of their homes will also need to finance premises and take into account the running costs incurred in renting or owning business space.

Money can be saved from opening a practice at home or through offering online therapy. There will be software or licencing fees attached to this but if you’re looking to keep set-up costs lower that would certainly be a way of reducing your outgoings.

Having said this, setting up your own private practice does mean you can charge what you need to. Although as a therapist you likely want to make your services affordable for everyone, you must balance this with what you need to earn to stay operational. Ultimately, you can’t help anybody if you cannot afford to run your business and so when setting fees it’s important to be thorough and pragmatic. You should also account for the loss of holiday and sickness pay that is, of course, a benefit of being employed.

Skills

You are an amazing therapist. You have helped so many people and you want to help even more. That’s one of the main reasons you are considering setting up your own practice. As a psychologist, you excel! But, how about as a business owner? Anybody can set up their own business. Of new businesses in the UK, 60% fold in their first 5 years. Now, this shouldn’t put you off too much because there are many different reasons for this. Many of which have absolutely nothing to do with the talents of those entrepreneurs. What is important to consider is all the other skills involved in running a business.

You will need to be a therapist but also a marketer, an accountant, you may need to act as HR manager. You'll also need to be able to present contracts and ensure you’re compliant with all legal regulations. The good news is that much of this can be outsourced. We highly recommend that those in a position to do so should consult or employ the guidance of experts in fields you have limited experience in. Again, there is a cost in doing so but you may find that these initial layouts save you money or even make you money in the long run.

Be honest about where your skills lie and where your time is best placed. Don’t be afraid to outsource parts of your business you’re not confident in. Remember, good business owners aren’t those who do everything themselves, they are those who surround themselves with the right people to help them excel.

What Do You Need To Start A Private Psychotherapy Practice?

Now we’ve done our compliance by laying out the challenges of setting up your own practice, let’s get excited about how we’re going to do it.

Here is a brief checklist for those looking to launch a private therapy practice, including some things you’ll need, some steps we advise taking and maybe even a little inspiration.

Insurance For Your Private Psychotherapy Practice

Insurance is not a legal requirement however, it is strongly recommended. Especially when you’re dealing with potentially vulnerable people. Make sure you do your research and get the most thorough cover you have access to. For more information on different types of insurance for psychotherapists, please see here.

Private Therapy Compliance

Ok, so it’s no fun thinking about what could go wrong right at the beginning of what should be an exciting journey. However, making sure you’ve got all your provisions in place will make you feel more confident and secure as you forge ahead. Protecting yourself and your business first will enable you to focus on your main role as a therapist.

You will need to:

  • Register with ICO and pay a fee for data protection
  • Draft or have drafted a therapy contract
  • Display website terms of use and privacy policy on your website
  • Consider a safeguarding policy (not a legal requirement but recommended)

Your therapy contract will be very important to you. Not only does it offer you protection by laying out the terms associated with your services but it also helps you to make decisions about how you’re going to run your business. Such as how payments will be made, what happen in the case of cancelled appointments and what your clients can expect from your service. A therapy contract will be one of your most important contracts and therefore, it may be worth seeking legal advice or finding a lawyer to professionally draft this.

Part of your therapy contract should state how you will protect your client’s personal information and records. Including, what would happen to them, should anything happen to you.

On a related note, you should also put in place a process for if you are for any reason unable to see clients and unable to contact them yourself.

Establishing Yourself As Self-Employed

You’ll need to decide whether you wish to be a sole trader or a limited company. Being a sole trader generally means less paperwork and is a simple model. Yet, registering a business with companies house and setting yourself up as a Director offers some personal protection and is considered a more desirable model if you’re planning on employing staff. Psychotherapy Practice partnerships may establish themselves as an Ltd or register as sole traders. However, a partnership agreement would also be advised.

Find A Mentor

Leaving an employer may feel great or it may feel a little scary. The truth is that even though there is freedom in self-employment, there are times when it is also lonely. Doing all the relevant research, weighing your options and making decisions by yourself can be overwhelming. Knowing somebody who has set up their own practice before is extremely valuable and it would be worth utilising their knowledge and experience. If you’re not fortunate enough to know another independent psychotherapist, it may be worth seeking out somebody who has set up their own business, even if it is in another sector. You will find much of what they have learnt is valuable to your business also.

Make A Plan

This one may sound obvious but you’d be amazed at how many start-up businesses don’t have a formalised written plan. If you’re bringing clients along with you, have a ticked-off to-do list for your compliance and have had someone build you a great website then it’s easy to think you have passed the point where you need a plan. However, the practice of writing a business plan is an incredible learning experience that may even change the way you decide to run your psychotherapy practice. Particularly when researching your competitors and looking at how they attract new clients.

Your business plan should include:

  • The Business Purpose: Aims, mission and values
  • Market Research: Competitor analysis, brand positioning and marketing methods
  • Business Structure: Fees, location, roles
  • Expenses: Set-up costs, running costs
  • Marketing Plan: Who is your target audience, online outreach, media, PR
  • Risk Analysis: What are your challenges
  • Growth Plans: Aims for the future, goal setting, target turnover for years 1-5

Where To Set Up Your Private Practice

As a psychotherapist, where you practice is going to be important for both you and the client. Selecting a location may involve considering where your clients would feel most comfortable but it is also important to choose somewhere that works for you. You may wish to keep a separate space for therapy sessions and for where you do your administration and paperwork. Or you may find a way to arrange the room that gives you both areas in the same space.

Private Practice Home-based Therapy

Home-based therapy is well worth considering if you’re looking to become an independent practitioner. Making therapy available in people’s homes means helping those with physical or mental barriers that prevent them from travelling to therapy sessions. Many therapists prefer treating clients, particularly children, in places where they feel more comfortable. However, it’s essential also that you can feel relaxed and focused and for some, that's more challenging when you’re transitioning between different environments. So whether home-based therapy is for you is a very personal decision.

A Private Practice In Your Home

It is possible to run therapy sessions from your home. However, there are not a huge amount of psychotherapists doing so. There are risks associated with treating people in your home that need serious consideration. However, if you’re wanting to operate in the comfort and familiarity of your own home, and save costs on renting a therapy room, then online therapy may be for you. Whilst, online therapy had a reputation as being detached and business-like, the pandemic changed the way we perceive online therapy and there are a number of advantages for both clients and practitioners. See more about the advantages and disadvantages of online therapy here.

Finding A Therapy Room

When looking for a therapy room it is worth having a few key essentials that you are unwilling to compromise on. For therapists, this usually includes quiet places and maybe also places that are accessible. You may look in business centres or serviced offices. However, these are not designed with therapy specifically in mind so you may look to wellbeing centres and other healthcare or wellness geared businesses with rooms to rent. A big advantage of renting a therapy room is being able to adapt it to create the right environment for therapy sessions. Although some spaces better lend themselves to this than others.

Do You Need To Register As A Psychotherapist With A Professional Body?

Whilst there is no legal expectation at all to register with a professional body, it may be worth considering if you’re going to start your own practice. Without the reputation of a facility or the NHS around you, your clients may wish to check your credentials. Belonging to a professional body signals that you have met the requirements to be accredited by them and can also underline the area of psychotherapy you specialise in. See a guide to the different professional bodies here.

Do You Need To A Lawyer To Start A Private Therapy Practice?

No, you are not obligated to seek advice from or work in any way with a lawyer when setting up your private practice. However, setting up a Private Therapy Practice is different from establishing other types of businesses. You are dealing potentially with vulnerable people, sensitive information and possibly even working in collaboration with third parties responsible for someone else’s care. Therefore, we highly recommend working with a lawyer to draft your therapy contract. This will be a key document for you going forwards and it needs to be clear, fair, thorough and compliant with best practices and other requirements such as data protection. There’s potentially a lot of legal information to learn in order to put this together properly and you’ll also need to keep up with any changes in regulations too. Working with a lawyer to create your essential contracts gives you security, the benefit of a knowledgable partner and ongoing peace of mind.

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